samchain/econo-pairs-v1 huggingface dataset:
The crisis exposed many significant structural weaknesses in the U.S. and global financial systems. Among them: Systemically important firms were allowed to operate with inadequate amounts of capital and insufficient liquidity buffers, and were overly reliant on short-term wholesale funding. They were excessively complex and interconnected with each other and with the shadow banking system. Large firms came up woefully short in monitoring, measuring and controlling the risks that could—and did—materialize under stress. Securitization markets suffered from a number of defects, including poor design for many securitized products and misaligned incentives in the credit ratings regime. This led to inflated credit ratings for many mortgage securitizations that subsequently performed poorly as mortgage delinquencies increased. There were significant problems in funding and derivative markets, including flaws in tri-party repo, money market mutual funds that were vulnerable to runs, and massive and opaque bilateral OTC derivative exposures. Finally, all of these problems were magnified by the lack of a good resolution process for large, complex financial firms that got into trouble. As a result, policymakers were forced to develop ad hoc interventions to contain contagion and to prevent the collapse of the U.S. financial system. We should never forget how close we came to a full-blown depression, and we must resolve to never allow a return to conditions like those that existed prior to the financial crisis. That said, it is entirely appropriate to take a critical look at the changes that were made to the regulatory regime.

I would once again like to thank the EU Delegation for enabling the implementation of this project with the hope for further support in providing subsequent project for the implementation of the recommendations, and thank the other guests for their presence. 2  BIS central bankers’ speeches
We started off with the wholesale CBDC project and later undertook the cross-border CBDC pilot program with the Hong Kong Monetary Authority, which has now been extended to include the People’s Bank of China and the UAE along with the involvement of the BIS. The next phase on the CBDC front is to undertake a retail CBDC pilot program. We think that this will be an important program to address our long-standing pain points in the financial sector, especially with regard to efficiency, high fees in certain areas, and more importantly, in the areas of access and inclusion. Page 8 of 9  I believe our initiatives on green and digital fronts are examples of what we are doing, not only to address the immediate problems facing us in getting out of the crisis, but also to look ahead, trying to put in place and lay foundations for Thailand and the financial sectors to be well-positioned and grow in the years following the crisis. In the post-COVID landscape, it is very important to put in place the groundwork and foundations which will facilitate new things to appear. Those new initiatives that will come about as a result of new digital infrastructure that we put in place, and the new opportunities provided by green, will propel Thailand in its next phase of growth after the COVID crisis. Thank you very much. Page 9 of 9

Of course, it is never easy to judge what levels of financial asset prices are realistic, and the risk of volatile adjustments remains, as we have seen in recent days, but the important point is that the downwards adjustment experienced last year, which could have been abrupt and might have generated wider economic effects, was in fact achieved without significant repercussions on the real economy. In both cases, the result is a better foundation for the prospects for sustaining growth in the economy. Let me now turn from the year past to the year ahead. I have stressed the encouraging performance of the economy over the past year, and the confidence we can hopefully take in its underlying soundness, because we undoubtedly face serious challenges and a material increase in uncertainty in  BIS Review 22/2001  1  the year ahead. Most notably, we have to manage the UK economy against the background of an international environment in which the US economy has begun to experience a sharp slowdown. Each quarter the Bank of England publishes an Inflation Report which sets out the MPC's considered view of the prospects for growth and inflation looking two years ahead. Let me start from our latest Inflation Report, published last month. That recognises that the weaker outlook in the US will depress global demand and dampen growth prospects in other countries. The UK cannot, of course, expect to be immune to this weakening process.
While this smoothing through risk sharing is of benefit to all EU members, as the recent crisis has shown it is particularly important for the euro area given the relative lack of adjustment mechanisms available to individual euro members when they are hit by shocks. And, the third objective should be to create resilience by ensuring that if the banking system is damaged there is an effective alternative channel of finance to the real economy. It is very probable that one of the reasons the US has recovered faster from its financial crisis than Europe is that in the US banks do not dominate the provision of finance to anything like the same degree as in the EU. When the banking system was damaged in the US, a welldeveloped alternative existed to help meet the financing needs of the real economy. To achieve these three objectives, reforms will be needed on both the supply and demand side of the equation. The supply side of the equation has two dimensions. First, enabling more household and corporate savings to flow to vehicles that will invest in capital markets. And second, encouraging more investors to allocate capital across the borders of EU members – or, to give it its technical name, to reduce “home bias”. As I have noted, assets under management in Europe outside the banking system are typically around half the size of the US. Creating large pools of market-based private capital is in part about creating the right investment vehicles.

A more integrated capital market would provide deeper, more liquid equity markets in which a wide range of corporates could issue equity and risks could be shared more widely. More broadly, areas where reforms could improve borrowers access to market-based financing could include: public platforms, such as, “mini-bond” markets for SMEs, which have enjoyed some success in Italy in particular; pan-European private placement markets which channel funds directly from non-bank investors, such as, insurers and pension funds to mainly medium-sized companies (currently only Germany and France have private placement markets of any notable size) and encouraging the emergence of simple, transparent and robust securitisation markets. 1 Increasing the scale of cross border capital flows across Europe brings benefits. But it is not without risks. One does not have to go back to where I started today – in the late 1950s – to find examples of the power of cross border flows to amplify crises when it all goes wrong. That is why they have to be built on the foundation of sustainable economic policies, good regulation and robust institutional structures. The nature of capital flows matters too. Europe was not short of cross border flows before the crisis. But they were concentrated in interbank lending and in debt often held by highly leveraged investors. Inter-bank lending can of course be a very dangerous way to share risks between economies, particularly if the banking system is highly leveraged.
Thus the structural analysis reveals that for the region as a whole, before the crisis in 2007 the role of the direct investments was significantly larger than that of the debt creating flows in creating international liabilities, whereas it turned balanced in 2013. By the end of 2018 as expected, mostly through deleveraging, the level of debt creating flows decreased. 13  Chart 10 Structure of NIIP  Source: IMF BOP data. The simple analysis of the external sector profile in the region, reveal compression of the current account gaps, slowdown in financial flows, and adjustment of the IIP position. Some of the adjustments might be a reflection of the unsustainable pre-crisis imbalances, some of them are cyclical, and some might be a result of structural shifts that boost competiveness, enable export to grow and gaps to be narrowed. Whichever the cause, it is critical to assess whether the adjustment and the current level are in line with what the fundamentals and policies would suggest. For this reason, we use the latest available results from the IMF external sector assessment and we construct a heat map to have broader vision of where the region stands in terms of the external sector imbalances. The current account focus offers a general conclusion that the region is broadly in line with fundamentals, with five out of eleven counties have current account in line with fundamentals according to the IMF estimations, and four have stronger position, while three show weaker position than what the fundamentals suggest.

Other investment flows have also fallen sharply as global banks reduced the size of their balance sheets after dramatic expansion of their crossborder activities during the pre-crisis boom. On the other hand, foreign direct investment (FDI) flows had actually increased slightly relative to the pre-crisis period. The same notion holds for the region as well. Financial flows from the region have been much weaker since the global financial crisis. In particular, other investment inflows have fallen sharply and turn into small outflows due to the process of deleveraging. Foreign direct investment (FDI) inflows also experienced slowdown, however the role of the direct investments in some countries is still strong as they were still going through the "expansion phase" when it comes to this type of flows. Portfolio debt flows have increased, reflecting a combination of factors, but mostly as a result of government borrowing abroad by issuing government bonds. 11  Chart 8 Financial flows and their structure  Source: IMF BOP data. Financial integration in emerging market and developing economies has risen substantially over the past two decades, delivering benefits but also posing new challenges. Guarding against a sudden stop or external crisis requires carefully monitoring of different aspects of flow and stock imbalances. Although it seems that flow imbalances narrowed in the region, for completing the picture it is essential to observe the stock positions, as well.
Svein Gjedrem: Economic perspectives Annual address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the meeting of the Supervisory Council of Norges Bank, Oslo, 20 February 2003 *  *  *  The global economy is ailing, plagued by a recent history of unsound investments, a fall in equity prices and fears of terror and war. In Norway, employees obtained the strongest increase in real wages for a generation in 2002. Petroleum revenues have generated excessive optimism. The imbalances caused by the combination of global stagnation and the high Norwegian cost level are leading to job losses and higher unemployment. Why has the krone appreciated? The krone is strong. As a result, prices for imported goods have fallen. This has led to low and stable inflation in spite of sharp wage growth. It would appear that inflation will also remain low in the years ahead. Chart 1. Effective exchange rates 1990=100 120  120 110  110  GBP  100  100  NOK  90  90  NZD 80  80  SEK  70  60  60 1990  70  1992  1994  1996  1998  2000  2002  Source: EcoWin  The krone exchange rate fluctuates. This is not surprising because other countries’ currencies also fluctuate. The Swedish krona depreciated sharply in 1992. Since then it has remained weak, but has shown wide variations.

Going forward, I view that there is a need for international institution that oversees all finance-related conducts to ensure strict compliance of rule, implementation of ethical codes and avoid double standard across nations. Lastly, continuous and collective reforms are vital. Crisis is a recurring phenomenon and no lessons from previous crisis will ever fully prevent the next one. But through the process of reform after each crisis, the market grows and becomes more efficient. Crises provide a window or “political feasibility” to undertake needed structural changes that  3  International Labor Organization (ILO). BIS central bankers’ speeches  3  may be hard to sell to the public in normal circumstances, so one should not waste a good crisis. I am pleased to see numerous improvements in key areas of finance and supervision such as the use of macroprudential measures to complement traditional monetary policy tools. It is also more acceptable to require banks to provision in good times against losses in bad times, for after all most bad loans are made in good times. In addition to structural reforms, change in “mindset” is probably the most important. In order to keep up with the dynamic global environment, we may need to challenge and correct some of our old beliefs.
From ‘ethical drift’ to ‘ethical lift’: Reversing the tide of misconduct in global financial markets Remarks given by Minouche Shafik, Deputy Governor, Markets and Banking  Panel Discussion at the Federal Reserve Bank of New York Conference on ‘Reforming Culture and Behaviour in the Financial Services Industry’ 20 October 2016  1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction  Misconduct in financial markets has existed for as long as commerce has existed. Thousands of years ago, 1  Chinese merchants found ways to hide trading profits through a variety of financial techniques . From the great South Sea bubble in the 1720’s to the mis-selling of railway stocks in the mid-1800’s through to more recent events such as the collapse of Bank of Credit and Commerce International and the failure of Barings in the mid-90’s – we have had a long and inglorious record of rogues, fraudsters and embezzlers in the financial services sector. But the wave of misconduct which has emerged in the aftermath of the financial crisis suggests that “this time is different.” The magnitude of the misconduct fines is indicative of the scale of the problem: since 2  2009, UK banks have paid almost £ billion in fines and redress costs, roughly equivalent to the private capital they have raised in the same period.

An important complement to actions by the official sector are efforts by market participants to create soft law: aspirational standards that are higher than the regulatory minimum and encourage ongoing behavioural change. Market participants are best placed to lead in the development of standards and codes which address real conflicts of interest within a given market place. Such standards 7  are widespread in many professions and are increasingly being used in the financial sector. Adherence to such voluntary standards can be encouraged through peer pressure, transparency, Kitemarking, and 6  The Fair and Effective Markets Review: Implementation Report is available at: http://www.bankofengland.co.uk/markets/Documents/femr/implementationreport.pdf 7 See Jay Cullen (2016) and David Rouch (2016). 3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  enhancing business opportunities through compliance. The official sector can also help enhance the effectiveness of soft law by engaging actively with the process and with the organisations that develop standards and industry norms. The Treasury Market Practices Group, sponsored by the Federal Reserve Bank of New York, is a good example of market professionals coming together to supporting the integrity and efficiency of the Treasury, agency debt and agency mortgage backed securities market. In the remainder of my remarks, I will set out what we have done in the UK to try to reverse the tide of misconduct, focusing on the role of hard law and soft law in shaping conduct and culture in the market as a whole.
Norway’s export revenues and government revenues can be expected to be very high as long as production remains high, and as long as the global market allows producing countries to extract substantial economic rent. At the same time, we know from experience that revenues may vary sharply from year to year. As a result of the high level of earnings and fluctuations in these revenues, the most important contribution fiscal policy can make to stabilising the Norwegian economy is to provide a sound, long-term plan for the use of petroleum revenues. Attempts to use the central government budget to fine-tune economic activity may, at worst, have a destabilising effect if these attempts are perceived as being a departure from the long-term plan for the phasing in of petroleum revenues. It is necessary to show that fiscal policy can be applied symmetrically in periods of economic expansion and contraction. A year and a half ago, the Government and the Storting adopted new guidelines for economic policy, which call for an annual use of petroleum revenues equivalent to the expected real return on the Government Petroleum Fund. At the same time, the Government issued a new operational mandate for monetary policy. Norges Bank shall set the key rate with a view to maintaining low and stable inflation. Monetary Policy Regulation (1) • Monetary policy shall be aimed at stability in the Norwegian krone's national and international value, contributing to stable expectations concerning exchange rate developments.

Never before in recent history have global interest rates been as low for as long as they are today. The interest rate level was moving down long before the 2008 financial crisis. What lies behind this is an enduring decline in long-term real interest rates. The decline is attributable to structural changes that have weakened the growth capacity of many economies, low productivity growth and weaker growth in the labour force. BIS central bankers’ speeches  13  In the wake of the financial crisis, interest rates fell from an already low level to even lower levels. Central banks slashed policy rates to counter the downturn. The room for further rate cuts was gradually exhausted. In this situation, central banks have shown a capacity for new thinking. They have purchased securities on a large scale. The purchases have continued to push down long-term rates. In addition, a barrier has been broken. In a number of countries, the policy rate is now negative. Negative policy rates can affect the economy via lower bank lending rates and a weaker exchange rate. These are well-known channels. But the effect of further policy rate cuts may weaken when rates fall below zero. An important reason is that banks are reluctant to set negative deposit rates, especially for households. For many retail customers, substituting cash for bank deposits is fairly inexpensive. If banks hold back on deposit rates, lending rates can only fall to a limited extent before banks’ earnings are reduced.
Gertrude Tumpel-Gugerell: Elements for intervention on accounting issues Speaking notes by Ms Gertrude Tumpel-Gugerell, Member of the Executive Board of the European Central Bank, at the colloquium “La juste valeur dans tous ses Etats”, organised by the Académie des Sciences et Techniques Comptables et Financières, Paris, 27 April 2010. *  *  *  Which are the issues related to the fair value for companies? Fair value is an appropriate measurement for certain financial instruments, notably those that are held for trading (i.e. business model is to generate profits by buying/selling in the short term) and for which reliable market prices are readily available, as well as for derivatives. Indeed, given that many derivative contracts have a zero cost at inception, fair value accounting is crucial as it recognises the potential leveraged exposure on the balance sheet. Fair value accounting mainly raises two issues: first, when to apply fair value measurement (conceptual considerations) and second, how to apply fair value measurement (operational challenges). First, in our view fair value accounting does not provide decision-useful information to investors if the intention of an entity is to hold the assets until maturity or to settle the liabilities at their nominal amount at maturity. In these cases, recognising interim fair value changes simply heightens the volatility of the financial accounts, without providing actual “information content”. This is typically the case for the loan book of commercial banks.

Despite some operational challenges that need to be resolved before its final adoption, this approach allows for a timelier recognition of expected credit losses, thereby contributing to mitigating pro-cyclicality. In this context, it should be noted that the Basel Committee has recently developed an approach which aims at reducing the complexity of the IASB’s approach. The ECB urges the IASB to work together with the Basel Committee with a view to developing a workable solution to a more forward-looking provisioning approach. This is also a good example of where the objectives of high quality accounting and safeguarding financial stability complement each other. On that note, let me finally underline that the ECB acknowledges the work of the IASB and welcomes the progress that has been achieved in the accounting framework. We look forward to continuing the intense dialogue with the IASB on the remaining phases of the financial instruments’ project, as well as other accounting areas that may be of importance from a regulatory perspective. 1  It should be mentioned that the same dynamics may apply in a boom, albeit in the opposite direction, resulting in increasingly “optimistic valuations” and thereby fuelling additional lending. 2  BIS Review 58/2010  As regards the convergence between the American implementation and the IFRS rules, which is your general view? More precisely, on which technical/conceptual points Europe will not give up? One of the key lessons to be learnt from this crisis is the need for international accounting convergence.
Saving regularly in particular shares or a mutual fund reduces the problem of timing but experience shows that the inputs should be spread over a long period. Another approach involves using various methods to assess when the stock market is high or low; as I need hardly point out to such an experienced assembly, this is not exactly easy. Diagram 1 Real earnings on shares, bonds and bank savings 8  7,0  7,2  7 6 5 3,5  4  3,2  2,9 2,4  3 2 1 0 Shares  Bonds  USA 1802-1998 13  Bank savings  Sweden 1918-1998  All three diagrams come from Bäckström, U. (2000), Tankar om aktiesparande (‘Thoughts about saving in shares’) Ekerlids Förlag, Stockholm.

Indeed, there are no signs that trading activity has been notably impaired for Treasury coupon  6  In my own remarks before the program began, I referred to asset purchases as an “imperfect policy tool” because of the limits on their effectiveness. See Brian Sack (2010), “Managing the Federal Reserve’s Balance Sheet”, remarks at the 2010 CFA Institute Fixed Income Management Conference, Newport Beach, California, October 4. BIS central bankers’ speeches  3  securities, even in those issues for which our holdings are particularly high. 7 Moreover, the market has not encountered any meaningful problems with delivery and settlement of Treasury securities. 8 Lastly, I should note that the market seems to have adjusted fairly well so far to the end of the purchase program. The pace of the Desk’s purchases fell back sharply at the end of June, as we moved from expanding the portfolio to simply reinvesting principal payments. In particular, our purchases slowed from an average pace of about $ billion per month through June to an anticipated pace of about $ billion per month going forward. We do not expect this adjustment to our purchases to produce significant upward pressure on interest rates or a tightening of broader financial conditions, given our view that the effects of the program arise primarily from the stock of our holdings rather than the flow of our purchases.