samchain/econo-pairs-v1 huggingface dataset:
Running through to 2024, the plan aims to integrate climate-related risk into the ECB’s monetary policy strategy, not just in asset purchases but also in the framework governing the collateral eligible for central bank refinancing. Central banks themselves also have a role to play in steering investment flows towards the green transition, in particular by greening their own funds. The Banque de France was the first Eurosystem central bank to adopt and implement a Responsible Investment Charter, which it did in 2018 for its own funds portfolios. It aims to limit the exposure of its assets to climate-related risk while also taking account of the impact of its investments on the environment, in keeping with the double materiality principle promoted by the EU. In conclusion, there is certainly no shortage of challenges for banks. However, I hope I have shown that these challenges are also opportunities. Accordingly, we should neither overstate nor underestimate their significance. Thank you for your attention. 6/6  BIS central bankers' speeches

Let me extend my appreciation to our industry associations and partners, including the Embassy of Switzerland in Singapore, Swiss House Singapore and Swiss Business Hub ASEAN for partnering IBF in its organization of the workshop on “Talent Development in Wealth Management” in November last year; and PricewaterhouseCoopers without whom we would not have had the pleasure of listening to Professor Collard today. I also wish to thank the Singapore Workforce Development Agency and the Monetary Authority of Singapore, for their close collaboration with IBF. I look forward to more of such collaboration between IBF and our industry associations and partners in the year ahead. I wish you a fruitful session ahead. BIS Review 81/2008  3
BIS central bankers’ speeches  5  Chart 1 Credit and business cycles  Chart 2 US interest rates  Source: Bank calculations  Source: Thompson Reuters DataStream; Bank calculations  Chart 3 US Credit Gap  Chart 4 Actual and implied capital in the US  Sources: BIS, OECD and Bank calculations  Sources: BIS, OECD, FDIC and Bank calculations  Chart 5 Policy rates in Europe  Chart 6 Credit gaps in Europe  6  BIS central bankers’ speeches  Chart 7 Bank capital ratios in Spain  Chart 8 Bank capital ratios in Ireland  Sources: BIS, OECD and Bank calculations  Sources: BIS, OECD and Bank calculations  Chart 9 Policy rates in advanced economies  Chart 10 Real long-term interest rates  Source: Thomson Reuters DataStream  Chart 11 Covenant-lite and other highyield loan issuance in the US  Sources: Bloomberg and Bank calculations. Chart 12 Taylor-Minsky rule for the UK  Source: JPMorgan Chase & Co. (a) Volume as of 15 November 2013.

BIS central bankers’ speeches  3  We do not need to run a counter-factual experiment to determine the macro-prudential responses to these emerging pressures. A number of countries have already taken preventative macro-prudential action to forestall excessive risk-taking (Table 2). These measures are intended to forestall too rapid an accumulation of credit. In short, macroprudential stringency is seeking to counteract any adverse risk-taking consequences of loose monetary policy. In the UK, the Bank of England’s Monetary Policy Committee (MPC) has been pursuing a policy of extra-ordinary monetary accommodation. Recently, there have been signs of renewed risk-taking in some asset markets, including the housing market. The MPC’s macroprudential sister committee, the Financial Policy Committee (FPC), has been tasked with countering these risks. Through this dual committee structure, the joint needs of the economy and financial system are hopefully being satisfied. Some have suggested that having monetary and macro-prudential policy act in opposite directions – one loose, the other tight – somehow puts the two in conflict [De Paoli and Paustian, 2013]. That is odd. The right mix of monetary and macro-prudential measures depends on the state of the economy and the financial system. In the current environment in many advanced economies – sluggish growth but advancing risk-taking – it seems like precisely the right mix. And, of course, it is a mix that is only possible if policy is ambidextrous. To underscore this point, Chart 12 plots a scatter of counter-factual Taylor and Minsky rules in the UK over the period 1964 to 2011.
However, no market participant wanted to be the first to begin charging margin out of  10  Several examples in the FX and fixed income markets illustrate that best practices would not be successful without the undeniable support of market participants. For instance, reduction is settlement risk due to the adoption of payment-versus-payment mechanisms, drop in settlement fails in U.S. Treasury markets after the implementation of the fails charge, and improvements in the derivatives markets infrastructure are just a few examples. 11  The BIS effort to develop an FX Global Code and the Bank of England’s leadership of the Fair and Effective Markets Review are two examples of this public-private partnership. 12  Automated trading has also been the focus of significant regulatory attention in the United States and elsewhere over the last several years. See, for example, the Commodities Futures Trading Commission’s proposed rules on “Regulation Automated Trading,” the recent Financial Industry Regulatory Authority (FINRA) amendment to the National Association of Securities Dealers Rule 1032, and the proposed amendments to the U.S. Securities and Exchange Commission’s Rule 15b9-1. 4  BIS central bankers’ speeches  fear that their counterparties would stop trading with them and move their business to a counterparty that did not require margin. The TMPG addressed this problem with a recommended practice that all market participants exchange two-way variation margin on a regular basis. 13, 14 Best practices can also encourage market participants to question long-established trading practices and advocate for change.

Simon M Potter: The role of best practices in supporting market integrity and effectiveness Remarks by Mr Simon M Potter, Executive Vice President of the Markets Group of the Federal Reserve Bank of New York, at the 2016 Primary Dealers Meeting, Federal Reserve Bank of New York, New York City, 7 September 2016. *  *  *  I would like to thank Radhika Mithal and Michelle Ezer for their excellent assistance in the preparation of these remarks, as well as colleagues in the Federal Reserve System and central bank community for their insightful comments and suggestions. Welcome to this year’s primary dealer meeting, and thank you for joining us today. Primary dealers play several important roles as trading counterparties of the New York Fed in its implementation of monetary policy, as participants in Treasury auctions, and as providers of information on market conditions to support the Desk’s monitoring of financial markets. 1 These annual meetings provide us an opportunity to strengthen this relationship and communicate our expectations for you. The official sector and market participants have a shared interest in ensuring that markets function efficiently, effectively, and fairly in the provision of financial services to all stakeholders, particularly firms and households. To help achieve these goals, the official sector employs a variety of channels, including legal, regulatory, and supervisory. In addition, officials work with market participants to create best practice guidance that complements official-sector initiatives.
Let me conclude, It is very challenging to deliver the goals and evolve when the top of one mountain is a bottom of another. However, we have to keep climbing with steps that will not only mean addressing the current burning issues, but structural hurdles as well. Macroeconomic policies can play a growth-supporting role, especially in the short-term, but cannot be a substitute to structural policies, which are key for increasing the resilience and lifting growth potential. In fact, many challenges that we face today are a result of neglect of structural policies in the past. It is not an easy task but to quote Jane Goodal "What you do, makes a difference, and you have to decide what kind of difference you want to make". And we as policymakers have to do what makes our societies more prosperous and resilient. Thank you. 4/4  BIS - Central bankers' speeches

6  BIS Review 23/2006  A clear and publicly known vision is for sure a key element in the development of eadministration, as it demonstrates the will and engagement of the governing bodies, sets the destination and indicates the direction to reach it, and motivates all the citizens, business community and clerks to undertake amicable and creative activities. Consequently, the following questions arise: •  Do we have a vision of Poland in, for instance, 2015? •  Does the public sector ask the citizens or business community whether they are satisfied with the level of services it provides? •  Do we encourage the Poles to assist in making public services more efficient? •  Do we have a system of financial and other incentives to encourage the public servants to assume relevant attitude so that the citizens and the companies are satisfied with the public services provided? •  Do we use properly the joint potential and synergy of the private and public sectors including, in particular, the financial sector, to build an e-economy able to meet the requirements of the XXI century? •  Are we ready to change the way we act and do the things we have never done before? If the response to most of the questions is “no”, it means that we must jointly undertake activities to reduce the distance between the e-economy of Poland and that of other countries. I hope the first Congress of e-Economy will inspire us to undertake such actions.
At the same time, regulators have continued to bulk-up their own resources in the face of a rising tide of regulatory rules. Ultimately, these costs are borne not by regulators or regulated firms, but by general taxpayers and bank customers. These come in the form of higher taxes, lower savings rates and higher lending rates. If system stability can be achieved in simpler ways, these are deadweight costs to society. (b) The unlevel playing field A second unintended consequence of the move to a model-based regulatory framework is that it has tended to work in quasi-discriminatory ways. In particular, it has tended to discriminate both between small and large banks and between new entrants and existing incumbents in the amounts of capital they are required to hold even against identical exposures. The reason for this is that small or new entrant banks will generally adhere to Basel I or simple standardised approaches for measuring risk. In general, they will have neither the data nor the technology to support internal model approaches. But simpler, standardised approaches tend to require much higher amounts of capital than internal model approaches. Indeed, this was a design feature of Basel II. Chart 8 demonstrates those differences among the major UK banks for a selection of portfolios. For an identical corporate exposure, a small bank on Basel I or a standardised Basel II approach holds, on average, twice as much capital as a large bank using models. For retail mortgages, these differences are larger still.

In addition, thanks to the solid solvency buffers and the support of the Central Bank of Cyprus that relaxed temporally the capital and loan origination requirements, the banking system has supported the domestic economy by providing fresh lines of credit from January 2020 to June 2022 of 8,1 billion Euros. 2,6b euros have been granted to households for mortgages, whilst 1,6 billions and 0,6 billions have been granted to the Wholesale and Hotel Industries which have been affected severely by the pandemic. Nevertheless, all the banks need to remain cautious, prudent and active in order to confront a challenging period that lies ahead us. Whilst the first round effects from the geopolitical crisis has been up until now manageable, the second round effects have  5/6  BIS - Central bankers' speeches  not yet materialised and uncertainty in an environment with high inflation and weakened growth prospects is elevated. Adverse macroeconomic developments may deteriorate banks' profitability and asset quality, causing delinquencies and an upward trend in impairments and provisions. Interest rate normalisation policies may support the banks' revenue capacity through higher yields. However, they might fall short to balance out the structural deficiencies that would be magnified if the economic prospects follow an adverse route. It is therefore of pivotal importance for banks to adapt their business strategies to the new realities forged by the consecutive crises. And this would not be an easy ride as challenges emerge, often in unpredictable ways.
And that is why adherence to, and the full and consistent implementation of, the Stability and Growth Pact and Fiscal Compact is so important. As I have said before, this is not a matter of theology; it is a political and economic imperative. Markets need to trust the capability of our governance framework to effectively coordinate fiscal policies in EMU, and citizens need to be confident that common rules are being respected. Let me add that any common fiscal capacity will be financed by current or future taxes on the same taxpayers and companies which already fund their national budgets. We cannot add to this edifice if its foundations are shaky, that is, if national budgets are not clearly sustainable. In concrete terms, this means that Member States should rebuild fiscal buffers into their national budgets to be able to weather future economic shocks, while at the same time adjusting the composition of their fiscal policies to optimally support the recovery. Once these buffers are available, the Stability and Growth Pact provides ample flexibility to adjust fiscal requirements to enable the functioning of automatic stabilisers on a national level and to react to a severe downturn in the euro area as a whole if need be. Whether the Stability and Growth Pact should be further reviewed or complemented with new features, such as sovereign debt restructuring mechanisms, to improve ownership and set the right incentives is an open question, with ramifications which go far beyond our discussion today.

When it comes to mutual insurance against asymmetric shocks, it is clear that fiscal risks do not always stem from fiscal action, but from unsustainable economic and financial policies elsewhere. Therefore, any move in this direction should be accompanied by a new convergence process towards more resilient economic structures. Such a process would allow us to advance together towards a better-equipped EMU, outlining a clear path of reform and a commitment to a fiscal capacity. Political convergence is needed to kick off such a process, as any new convergence process can only be as effective as the legitimacy underpinning it. Conclusion Let me conclude by saying that protection against moral hazard is of course very important. At the same time, it should not be used as a strategy to relegate the move towards a fiscal capacity for the euro area to never-never land. The move towards a fiscal capacity could take the form of a gradual and conditional process that allows us to move in parallel towards restored fiscal buffers at the national level, convergence in the capacity to absorb shocks at the national level and a strengthening of institutions at the euro area level, while moving, equally gradually, towards more central fiscal stabilisation. 3  See Cœuré, B.: “Drawing lessons from the crisis for the future of the euro area” speech at “Ambassadors Week”, Paris, 27 August 2015. BIS central bankers’ speeches  3  I think we should be more ambitious in that respect.
Such an approach ensures that changes in Bank Rate are transmitted along the yield curve to the longer-term rates more relevant to spending and pricing decisions, while also allowing learning about the impact of policy decisions ahead of making irretrievable mistakes in one direction or the other. Viewed through this lens, the decision to raise Bank Rate by 25bp earlier in the month should be seen as part of a broader transition in the stance of UK monetary policy over the past year. From the onset of the global financial crisis, and then in the aftermath of the European sovereign crisis, the fallout from the Brexit referendum and the Covid-19 pandemic, UK monetary policy has been in supportive mode – and understandably so. [8] But now that inflationary pressures are reemerging, the labour market has tightened and risks to the outlook have become more two-sided, monetary policy is undergoing a transition. Forward guidance pointing to rates remaining close to zero has been retired. Asset purchases have ceased. Bank Rate has been increased. The asset portfolio accumulated through QE has started to run off. In all this, the transition has respected the old adage: less haste, more speed. The further increase of Bank Rate to 1% should be seen as part of this transition process. But it is not the end of the transition. In my view, we still have some way to go in our monetary policy tightening, in order to make the return of inflation to target secure.

Knowing how asset sales have influenced the market, the setting of Bank Rate can then be calibrated in order to achieve the inflation target over the medium term. In this context, trying to add some quantitative calibration of the impact of asset sales on the  Page 17  economy and price developments directly into our macroeconomic forecasts would amount to double counting. Concluding remarks Earlier this month, the Bank of England celebrated twenty-five years of independent responsibility for monetary policy, institutionalised in the creation of the Monetary Policy Committee. That celebration has come at a testing time for UK monetary policy, for the reasons I have outlined in my remarks today. With inflation forecast to rise into double digits following the very sharp rise in international energy and goods prices, this is biggest challenge the MPC has faced over the past quarter of a century. It is in these testing times that the anchor represented by the 2% inflation target comes to the fore. Supported by the independence accorded to the MPC to pursue that target, we are able to take the sometimes tough decisions to bring inflation back to 2% and keep it there sustainably. It is that commitment that has led me to support a tightening of monetary policy since I joined the Committee last September, and to signal today that this tightening still has further to run. The views expressed in this speech are not necessarily those of the Bank of England or the Monetary Policy Committee.
Because even if one has prepared the way, changes often mean that all those involved must undergo a period of “learning by doing” before everything falls into place. This applies not least to us, I would like to emphasise. The changes also mean, in particular our own interest rate forecast, that we are now sticking out our necks and opening up for criticism more than before. When we describe our policy it is no longer in the form of a simple, but perhaps slightly misleading policy rule. This was the way things were before when we used the more easily understood, but less realistic, assumption of an unchanged repo rate. Instead we are painting a more complex picture, the way it actually looks to us who make the decisions. Slightly more complicated on the one hand, but on the other hand more realistic and with significantly better opportunities to evaluate our work! The fact that we are publishing our own forecast for the policy rate also means that it will be very clear when we reconsider our view of what interest rate policy will be needed in the future. It also becomes evident when our assessment differs from that of the market, and these differences often cause a debate. But the fact that we are criticised for changing our minds, or for our views being different from the market view, is hardly a reason to refrain from reporting as honestly as possible what we believe.

I do hope this seminar is going to offer you the opportunity for fruitful discussions and the experience and skills you gain from here will be beneficial to all of you. This is quite a special place for such a seminar since, for eight years in a raw, we organised along with the International Monetary Fund a regional conference on financial stability issues. Thank you and enjoy your dinner. 2  BIS central bankers’ speeches
The initial foreign currency mismatches in their balance sheets have been reduced are now within the limits provided for in Central Bank rules, and their domestic and foreign liquidity positions have improved. But the banks are operating in the shelter of the capital controls, and looking ahead, questions concerning their size and efficiency remain to some extent unanswered. Many factors have been favourable for us in spite of global headwinds, which were initially reflected in a marked deterioration in terms of trade and are still reflected in a weak economic recovery among our trading partners. Looking back at the three challenges I mentioned a moment ago, we can say in broad terms that the macroeconomic goals have been met thus far. The financial system now stands on much more solid ground. It is primarily in connection with the third challenge, of reintegrating Iceland into international capital markets, that more work needs to be done. But even in this area we have made significant progress. GDP growth, a balanced economy, a Treasury surplus, and the Central Bank’s foreign currency purchases have created good conditions for the liberalisation of the capital controls. The credit ratings of the sovereign and the commercial banks have improved. The sovereign regained access to foreign credit markets some time ago, and the banks have opened a crack in the door. But even though we have made significant progress, the game is not yet won. Debt levels are high, rendering borrowers vulnerable to shocks, and the capital controls are still in place.

Iceland’s macroeconomic balance is good, but fragile. On this score, we face three relatively important risks: first, that the interactions between labour market unrest and the turnaround from output slack to a positive output gap could undermine price stability and turn the current account surplus into a deficit; second, that lifting the capital controls could turn out badly, with negative implications for exchange rate stability, inflation, and financial system stability; and third, that the global economic situation could turn against us. Therefore, we must avoid complacency, and we must be vigilant if we are to safeguard our recently achieved stability and face down the three challenges that I have mentioned just now. In some respects, formulating monetary policy is complex at present, as it has been at times in the past. The Central Bank’s interest rates were lowered by 0.75 percentage points in the final two months of 2014, in response to rapidly falling inflation and the decline of inflation expectations to the target. Since then, inflation has dropped still further, falling below 1% in December, triggering the submittal of a report to the Government on inflation below the deviation threshold. Even though inflation is now below 1%, the Central Bank’s key interest rate has been unchanged at 4.5% so far this year. There are a number of reasons for this. First of all, the extremely low inflation rate is due partly to the abrupt drop in global oil and commodity prices in the second half of 2014.