samchain/econo-pairs-v1 huggingface dataset:
Beyond that, there might well be some general improvement in market functioning, reflecting the reduction in regulatory uncertainty and the more resilient financial system that the regulatory agenda is designed to deliver. At the moment, market intelligence suggests that market participants are focussed on the elevated uncertainty and have not yet anticipated the benefits of, for example, a safer banking system. Conclusion Financial markets have come a long way since the epicentre of the crisis in 2008, with many markets that were significantly impaired in the crisis now functioning well. That progress is encouraging in terms of financial stability and support for the real economy, but further healing is still required. Looking ahead, there are some clear obstacles to that process. The sovereign debt crisis, currently focussed on the euro area, is one. And the general recovery in the macroeconomic outlook is another. There will also be a lot of uncertainty embedded in markets until final details are available on the majority of the regulatory agenda. That agenda must be allowed to take sufficient time to get the right answers, but as these become available we should expect to see further improvements in market functioning. Meanwhile, the authorities will need to pay particular attention to the next rounds of financial innovation, especially given the prolonged low interest rate environment. 12  BIS central bankers’ speeches

Anita Angelovska-Bezoska: Workshop on fintech - opening remarks Opening remarks by Ms Anita Angelovska-Bezoska, Governor of the National Bank of the Republic of Macedonia, at the NBRM Workshop on Fintech, Skopje, 28 May 2018. * * * Dear Mr. Jay Tikam, Dear colleagues, It is my great pleasure to open the NBRM workshop on a topic that has been attracting a rising interest by regulators, supervisors and central bankers, i.e. a workshop on fIntech organizations that, by combining new business models and innovative technology, gradually change the shape of the financial services segment. The main idea of this workshop is to become better acquainted with this rather new but very important topic. It has been organized with the support of the European Fund for Southeast Europe, for which we are thankful. Although in continental Europe, fintech companies account for just a small share of the markets for banking, payment services and asset management, still they are on the rise as they are rapidly entering the markets and competing with banks. According to Ernst&Young’s Fintech Adoption Index, one-third of the consumers utilize at least two or more fintech services and they are increasingly aware of FinTech as part of their day-to-day activities.
As in other countries, the surge in oil and food commodities prices largely explains this, although the Spanish economy’s high energy dependence and low energy taxes have tended to amplify this effect. The latest figures point to the start of what should be a phase of gradual containment, though I shall return to this point later. Among the factors that have weakened expenditure growth is the tightening of financial conditions. Given its close relation to the international financial crisis, it is appropriate to focus on the analysis of the behaviour of credit in Spain during this period. Loans granted by resident banks to Spanish households and firms began to slow before the increase in defaults on US subprime mortgage loans unleashed the present international financial crisis. The gradual increase in financing costs, the downward revision of expectations of future income and rises in wealth, and the very levels of debt attained had already acted before the summer of 2007 to lower the growth rate of debt towards a more sustainable pace. Naturally, greater caution in risk assessment and the sharp reduction in international financing flows that the international financial crisis has entailed have further dampened the supply side, likewise contributing to slowing credit. 4  BIS Review 122/2008  As an overall result of both forces, the latest figures show year-on-year growth rates of financing to Spanish households and firms of around 10% and 7%, respectively.

The behaviour of wage costs and the high margins seen in certain activities tend, moreover, to make the inflationary episode more persistent, with the adverse consequences this may have for price and cost-formation habits and for the trend of the relative prices and costs that bear on the economy's competitiveness. It is therefore very important not to lose sight of the fact that the main instrument available in the current circumstances is that of making structural reforms that enhance the economy’s flexibility, liberalise certain sectors and markets, and increase competition. Despite the efforts made in recent decades, there are still numerous areas of the Spanish economy that need reforms. I do not intend to address these in detail, but I shall refer briefly to those spheres where I consider pressing action is needed. And I should stress that it is here where the potential room for manoeuvre to counter weakening growth in the euro area is to be found. 6  BIS Review 122/2008  In the labour market, it is imperative to bring about a milder reduction in employment in cyclical slowdowns. In this connection, we must explore channels which provide a response by wages to changes in the economic environment, aligning them to productivity gains, and avoiding upward inertia in the face of external shocks introduced by mechanisms such as wage indexation clauses.
A distinction needs to be made here between two steps. As I noted earlier, entry into ERM II requires a full peg to the euro, either before or on the day of entry. Let us assume the Maltese lira peg to the euro is increased from 70 per cent to 100 per cent before entry. The same principle that applied to past revisions to the exchange rate basket will apply on this occasion, too. When the currency basket was last updated, in August 2002, the value of the lira was derived on the basis of the old basket, which at the time was composed of currency portions representing the euro, with a 56.8 per cent weight, sterling with 21.6 per cent and the US dollar with 21.6 per cent. The revised weights - 70 per cent euro, 20 per cent sterling and 10 per cent US dollar - were used to derive the new currency portions and produced the same value for the Maltese lira as under the old basket. In the same way, the switch from a 70 per cent peg to a 100 per cent peg will not entail a change in the level of the lira/euro rate from that prevailing under the current exchange rate regime. I hope this will correct the impression some people have that the peg to the euro will automatically result in a change in the value of the lira beyond the normal day-to-day market movements currently observed.

Consequently, a reversal of the upward trend in reserves and in bank liquidity was expected as the relatively low level of domestic interest rates inevitably induced some restructuring of the banks' investment portfolios. As a result, the level of foreign assets in bank portfolios increased. So that, while the Central Bank of  Malta's reserves declined by around Lm82 million in the year to January 2005 those of the commercial banks rose by about Lm66 million in the same period.
(2005), Price-Setting in the Euro Area: Some Stylised Facts From Individual Consumer Price Data, ECB Working Paper No 524; for the United States, see Bils, M. and P. J. Klenow (2004), “Some Evidence on the Importance of Sticky Prices”, Journal of Political Economy, Vol. 112, No 5, pp. 947-985. 6  See, for instance, Sahuc and Smets (op. cit.). 7  See Sahuc and Smets (op. cit.) as well as Cristiano, Motto and Rostagno (op. cit.). 8  See the article entitled The “Activism” of Monetary Policy published in the November 2006 issue of the ECB’s Monthly Bulletin. See also J.-C. Trichet (2006), chairman’s speech delivered at the conference entitled “The ECB and its Watchers IX”, held in Frankfurt am Main on 7 September 2007. 4  BIS Review 135/2008  One way of boosting monetary policy’s effectiveness is to reduce the overall persistence of inflation, which can simply be defined as the period of time that inflation takes on average to return to its initial value after a shock. The overall persistence of inflation can be represented 9 as a function of two factors, apart from the price inflexibility that I have just mentioned. The first factor is linked to the extent to which, when determining prices, agents stay focused on the long-term inflation target rather than allowing themselves to be guided by the most recent inflation trends; in the Phillips curve this is represented by the coefficient on past inflation.

Not only do Europe’s governments have far higher revenue as a percentage of their GDP, they also show a broader quota of social security contributions in respect of direct and indirect taxation (15% of GDP in the euro area, as against 7% in the United States), which tends to make the system more gradual. Fourthly, redistributive policies are also expressed in other ways than through government expenditure, for instance through the regulation of labour markets. On the basis of a series of indicators such as minimum wages, the legal safeguards protecting those in employment and the unemployment benefit replacement rate, the United States is at a lower level than the 20 average level for the EU. One way of measuring the magnitude of automatic stabilisers is the budget’s overall sensitivity to cyclical fluctuations in the economy, which can be expressed in terms of the elasticity of the primary budget balance (as a percentage of GDP) in relation to the output 21 gap, in other words the gap between real revenue and its potential level. If budget policy is anti-cyclical, the coefficient should be positive (in other words, it increases in a phase of expansion and decreases in a recession). An OECD study gives us a correlation of 0.48 for 22 the euro area and 0.34 for the United States. The lower overall budget responsiveness to the economic cycle in the United States can be ascribed both to lower current expenditure elasticity and to low tax responsiveness compared with most of the countries in the euro area.
Under one important prerequisite: the private sector should play its part in the effort, and we should unlock cross border capital flows for the transition; this is the strongest argument in favour of a Green Capital Markets Union, which I advocated with my German colleague Joachim Nagel x). Except in 2022 and the exceptional energy shock, the euro area had a structural excess of savings to investment of 2% of GDP. Hence, provided we have the right economic incentives, Europe can finance its ambitious climate transition; this final and fundamental conviction is a good piece of news. * **  Good news is also important in what could seem like an ocean of alarming information on climate change. Our natural tendency to shut our ears when faced with pessimistic announcements was best captured by Homer with Cassandra. She repeatedly tried to warn that Troy would fall should they let Ulysses’ Trojan horse get into the city. I don’t claim to be Homer or even Cassandra. I tried this morning to sum up in a fair way what we know and don’t know yet about the macroeconomics of climate change, but above all what we can and must do as soon as possible – we are already in “money time”. I thank you for your attention.

This quadrant [slide 4] shows four categories of possible shocks linked to the transition. They can have a positive versus negative impact on supply, and a positive versus negative impact on demand respectively. They are not mutually exclusive, and may combine or succeed one another. Their stand-alone probability is hard to assess at this stage, but there are reasons to believe that the upper-left one (the negative supply shock) is slightly more probable than the  Page 5 sur 8 others. However, given the large range of shocks, their sources and macroeconomic effects – which could include a positive scenario of large green private capex v – [slide 5], we must continue our modelling, in line with our first commitment in relation to the ECB’s climate agenda: we committed in July 2022 to “assess the macroeconomic impact of climate change and mitigation policies on inflation and the real economy”. vi  But being uncertain about the combined macroeconomic effects does not mean being passive or inert on action now. What we can already derive from these scenarios is a set of four firm convictions and prescriptions. 1. A shock that is global and certain >>> an orderly transition - First, climate transition entails structural changes to the global economy that are both universal and certain, with an overall and possibly negative supply shock that will generate frictions and costs in terms of the necessary reallocation of production factors.
This has been evidenced in studies reviewing factors behind currency crises in emerging countries. Macro data –such as balance of payment or 13 fiscal policy indicators– prove to be discriminant-leading indicators from this point of view . However, I cannot affirm that the resolution of market imbalances would result in a reduction of volatility to levels that prevailed before these imbalances were taken into account by market participants. In my view one should not underestimate the part played by technical factors in the persistence of volatility peaks. This persistence in volatility is fuelled by technical features that facilitate the build up of mimetic behaviours (amplifying effects), or that reinforce the links between the various market segments (diffusion effects). Mimetic behaviour is of course by no means a new phenomenon on financial markets. However benchmarking, index management, and risk management techniques may have gradually reinforced this type of behaviour, as participants are under increasing pressure to follow their peers through matching the performance of a benchmark. There is no doubt that the spread of benchmarking allows fund managers and clients to better assess their performance against that of other funds. But, in a context of growing competition within the sector, it may well have increased mimetic behaviour. Some market participants (whose own compensation is closely linked to the relative, rather than absolute, profit and losses they generate) may indeed have come to the conclusion that it would be better to be wrong along with everybody else, rather than to run the risk of being right alone.

In the same way, the crisis revealed the critical deficiencies in the toolkits available to the regulators to deal with nonbank institutions in duress. Emergency lending by the Fed might be enough to forestall the disorderly failure of a systemically important institution and all the wider damage such a failure might cause, but it was a blunt and messy solution, employed as a stopgap measure because better alternatives were not available. What is needed – what our country still lacks – is a large-firm resolution process that would allow for the orderly failure even of a systemically important institution. 2  BIS Review 6/2010  Thus, in the fall of 2008, regulators and policymakers found themselves facing the prospect of the total collapse of a complex and interconnected system. It was these circumstances, and the prospect they created for an even deeper and more protracted downturn in real economic activity and employment, that required truly extraordinary actions on the part of the Federal Reserve, as well as the Treasury and many other agencies. This is a situation in which the United States must never again find itself. For its part, the Federal Reserve is hard at work on developing and implementing new regulations and policy guidance that take on broad lessons of the recent crisis. We are working with other banking regulators in the United States and overseas to strengthen bank capital standards, both by raising the required level of capital where appropriate and improving the risk capture of our standards.
In Sweden, we have several historical examples of successful coordination on the payment market. In 1925, the public-owned Postgirot was formed to answer the need for more efficient mediation of payments via cashless payments by giro transfer. As this was a social need, a publicly owned solution was created to facilitate the required coordination. In the 1950s, the banks then formed their own version in the form of Bankgirot, in which standardised paper forms facilitated the management of payments between banks. In more modern times, the Swedish banks have also collaborated over withdrawals from ATMs and purchases with debit cards, to give two examples. They have also established a joint system for Bank ID and, a few years ago, the mobile application Swish 18, to which the largest Swedish banks are connected. The Swedish banks have been able to take continual advantage of the benefits of coordination to which economies of scale give rise. Again, this is something that we perhaps do not give too much thought to, but in many other countries these activities do not work anything like as smoothly. There, for example, it can be difficult or expensive to withdraw money from another bank’s ATM. In Sweden, the Riksbank provides, like the central banks of other countries, a central payment system so that the banks can exchange money with each other. Allow me to explain in a little more detail what this means, before going on to discuss the challenges we must consider for the future.

Thomas Jordan: Repercussions of the financial markets crisis in Switzerland Summary of a speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the Zuger Wirtschaftskammer, Zug, 28 April 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The turbulence in the financial markets that began in August 2007 is having a generally negative impact on the Swiss economy and is spreading through different transmission channels. The downgraded growth prospects for the US economy are resulting in fewer imports from the rest of the world. Since net exports and the global economic developments are of particular importance for Switzerland, they are having a negative effect, which may be reinforced by the appreciation of the Swiss franc. Because of the major importance of banking in the industrial structure of the Swiss economy, falling turnover on the financial markets can also affect Switzerland more severely than other countries. Moreover, rising credit risk premiums result in higher financing costs for companies, and the deterioration in bank balance sheets could be an additional factor in compromising the availability of credit in Switzerland. Finally, the increase in commodity prices has had a significant impact on the inflation rate in Switzerland. Despite the fallout from the financial crisis, the outlook for Switzerland‘s economy remains good. In Europe – which is crucial for Switzerland – the economy will probably weaken only gradually.
I hope my remarks, which are based on a whitepaper we published earlier today, will offer a complementary perspective to the type of work already underway by other supervisors and regulators, including the UK regulators (FCA and PRA), the Australian Prudential Regulation Authority (APRA), DeNederlandsche Bank (DNB), the Hong Kong Monetary Authority (HKMA), and other institutions like the Financial Stability Board and the Group of Thirty (G30). I am focusing my remarks today specifically on “misconduct risk,” but the conceptual arguments and framework apply more broadly to financial sector risk management in general. Please note that the views I express today are my own and they do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.1  Misconduct Risk A primary goal of bank regulators and supervisors is to support the sustained provision of financial services to households and businesses in a fair and transparent way. In order to do this, we examine financial institutions, individually and collectively. We assess safety and soundness to ensure firms have the appropriate risk identification and risk management processes for prudent banking. We hold them to standards that require them to be resilient to a broad range of potential risks such as credit, market, liquidity, and operational risk. One specific risk is employee “misconduct risk.” We define this as the potential for behaviors or business practices that are illegal, unethical, or contrary to a firm’s stated values, policies, and procedures.

First, with regard to significant Spanish banks, the Banco de España, in addition to providing its experience and most of the staff of the joint supervisory teams, will shoulder the weight of on-site inspections, it will participate in the preparation of all the decisions to be adopted by the ECB Supervisory Board and it will be active in the exercise of its sanctioning powers. As regards the sanctioning regime, it should be stressed that the European Central Bank will be responsible for imposing sanctions, provided that three requirements are met: that the sanction is imposed on the credit institution, i.e. on the legal person; that it stems from noncompliance with directly applicable European Union legal rules; and that the sanctions are of a pecuniary nature. In the remaining cases, power will continue to be exercised by the national supervisory authorities, without prejudice to the ECB being able to demand that the appropriate proceedings be initiated. Second, as stated, the Banco de España will continue to be fully responsible for the supervision of the 81 credit institutions deemed less significant.