samchain/econo-pairs-v1 huggingface dataset:
Figure 15 shows that the population has increased much more than the number of completed homes over the past ten years, which is an indication that housing construction has been too low. Despite housing investment now increasing, it is important that structural problems on the housing market are discussed so that we can obtain greater efficiency on this market in the longer run. Several inquiries have put forward proposals regarding what needs to be done, most recently this was done in an annex to the Long Term Survey of the Swedish Economy. Not having an efficient housing market is not merely a problem for indebtedness, it can also comprise a threat to a healthy development of society and it can create conflicts between the generations. The Riksbank has long pointed out the risks linked to the high level of household indebtedness and has previously also weighed in them in the repo-rate decisions to some extent, by setting the rate somewhat higher than would otherwise have been the case. However, the effect these considerations have actually had on monetary policy – the amount by which the repo rate has actually been set higher – has been exaggerated substantially. There are quite simply limits as to how far the policy rate can be used for this purpose. And 6  BIS central bankers’ speeches  let me emphasise that the main focus for monetary policy has always been to bring inflation back on target and to attain a good development in the real economy.

The question of which should be the role of central banks in  3/4  financial crisis prevention or mitigation is still far away from reaching any definite answer. Several papers in this conference will deal with this important issue. Third, we need to have a better understanding of how monetary policy and other macroeconomic policies are transmitted. By now, it is clear that the standard new Keynesian framework, which still shapes our general view of the basic elements of monetary policy, has some relevant shortcomings. For example, recent research has underlined how additional channels related to household and firm heterogeneity may provide a more realistic depiction of how monetary and fiscal policies affects the economy, modifying –or even overturning- some of the prescriptions derived from models with representative agents. This is a line of research linking both empirical and theoretical work that may have consequences for our work as central bankers. Your discussions over the next couple of days will help to improve our understanding of some of these complex issues, ranging from the emergence and consequences of bubbles in asset markets, to the role of individual heterogeneity in the transmission of macro policies and in the aggregate incidence of financial frictions. Conclusion To conclude, I would like to say that both policymakers and academics face new challenges in our understanding of how central banks should act in order to fulfill our mandates and maximize the welfare of the citizens we work for.
The real estate sector is identified using SIC (2003) and SIC (1992) codes (the sample ranges from around 450 to 1,600 firms). BIS central bankers’ speeches  13  Chart 15:  Chart 16:  Changes to UK gross government debt ratio in crisis periods  Public debt ratios in G7 countries  1929 crash 1990 recession  cumulative pp change since start of recession 30  2008 financial crisis  PPP weighted  Percentage of GDP 140 120  25 100  20 80  15 10 5  0  1  2  3 4 years since crisis  5  40  0  20  -5  0 1940 1950 1960 1970 1980 1990 2000 2010  6  Sources: Office for National Statistics, Thomson Reuters Datastream and Bank calculations. 14  60  Sources: IMF Historical Public Debt Database, IMF World Economic Outlook (April 2011), Angus Maddison historical statistics and Bank calculations.

Risk on/risk off is precisely such a popular narrative.4 The effect of popular narratives is to increase psychological contagion in financial markets. Simple stories generate market mood swings. The greater the uncertainty, the more compelling the simple story and the greater the amplitude of these mood swings. These  2  Reinhart and Rogoff (2010). 3  For example, Tversky and Kahneman (1974). 4  For example, Akerlof and Shiller (2009), Tuckett (2011)  4  BIS central bankers’ speeches  swings in turn result in a detachment of risk perceptions, and hence asset prices, from reality. Financial trauma, like personal trauma, can increase this detachment from fundamentals. For those who lived through it, the Great Depression had a lasting effect on financial risk-taking. “Depression Babies” have been shown to seek less risky capital structures and to avoid financial stocks.5 The scarring effects of the Great Depression on risk attitudes help explain the excess premium demanded by equity investors during the previous century.6 The Great Depression left risk-taking scars that lasted a lifetime. The Great Depression has now been lost from most investors’ experience sample. Indeed, that fact might help explain another popular narrative from the past – the Great Moderation. But the Great Depression has recently been replaced in investors’ experience sample by the Great Recession. Whether this will spawn an era of “Recession Babies”, with a permanently lower appetite for financial risk-taking, remains to be seen.
Further, the banking system is concentrated to a few large banks and these are tightly interconnected. This means that financial unease can spread and problems in one major bank can affect not only the Swedish financial market, but our entire region. Several other countries with large banking systems have introduced or are planning to introduce leverage ratio requirements of around 5 per cent. So the introduction of a global leverage ratio requirement is a step in the right direction, but we on the Basel Committee have agreed that further measures are needed to reinforce global financial stability and reduce the risk of future financial crises. The internal models have caused confidence to decline... In recent years, confidence in the banks’ internal models and calculations of risk weights has declined. Regulators as well as banks and market participants have begun to doubt whether the capital requirements reflect the banks’ risks in a correct way and whether they enable comparable capital relations between different banks. In many countries the banks’ risk weights have fallen substantially over time. This has been evident with regard to the major Swedish banks over the past ten years. It is largely because the use of internal models has increased during this period.

Sixty years ago, anyone wanting to start a bank was forced to get permission to do so from His Majesty the King. This was a system that was probably considered reasonable and well-balanced bearing in mind the environment in which the banks then operated. Today it is natural that Finansinspektionen should give Swedish banks licence to conduct their operations, but the number of new banking regulations has also increased over the past 35 years. The banks’ change in significance for society, internationalisation and the complexity of both financial markets and financial instruments have all meant that the Riksdag (the Swedish parliament), the Government and Finansinspektionen need to both adapt existing regulations and develop new ones. It is a major challenge for society and a complex balance to ensure that regulation of the banks safeguards financial stability at the same time as contributing to efficient markets, good competition and good consumer protection. But as I mentioned earlier, it is not only values that change over time, but we also gain new experiences and draw conclusions from these. One event that forms a base for modern banking regulation took place in the 1970s. This is when the system with fixed exchange rates was abandoned, the Bretton Woods system that had been agreed on decades earlier by the world's leading economies. In the wake of this, a number of internationally-active banks became insolvent due to losses linked to transactions in foreign currencies.
I know that the final outcome of our discussion, the rotation of voting rights based on three groups, has met with certain criticisms not only from the media, but also from the members of this Committee. Therefore, allow me to highlight a few crucial features of the new voting system, which might help to clear up any misunderstandings about the functioning of the system and the motivation behind it. First of all, I should like to stress that the "enabling clause" contained in the Treaty of Nice had set us clear legal limits, in that any reform should be restricted to a change in the voting modalities only. More fundamental reform options were, therefore, outside the scope of our discussions. For example, suggestions by academics or media commentators to restrict the membership of the Governing Council, to delegate decision-making on monetary policy to the Executive Board or some form of Monetary Policy Committee would call for more fundamental changes to the Treaty than foreseen by the "enabling clause". The Governing Council sought to devise a system which maintains its capacity for timely, efficient and euro-area focused decision-making in a substantially enlarged euro area. Therefore, we recommend to cap the number of NCB governors with a voting right at 15, which is the number of governors under the "Maastricht" framework if all current Member States were to have adopted the euro, with the six members of the Executive Board retaining a permanent voting right.

On some measures, last year – 2004 – saw the strongest growth in the world GDP in 30 years. While there has been some reduction in growth this year, most forecasters’ central expectation is that it will not prove very marked. From a UK perspective however, the external conjuncture has been significantly less supportive than this implies. The key point is that the upturn in world growth has been very unbalanced, being driven largely by the US and China. Measures of world activity which give a high weight to these two countries paint a pretty buoyant picture, especially those which use purchasing power parities. However, less than 2% of UK exports go to China and rather less than 20% to the US. Fully 50% go to the euro area, which has grown only sluggishly, and whose growth forecasts have persistently been revised down. And Germany, Italy and the Netherlands – countries which between them take around 25% of UK exports – have underperformed the euro average. As a result world GDP weighted by countries’ importance in UK export markets has shown much a weaker recovery. World price pressures have also been stronger than in recent previous cycles. This largely reflects the sharp rise in the price of oil since early 2004 – a development which seems to have taken almost everyone by surprise. This is a complex story.
Banks’ newfound resilience has been demonstrated recently, as they have dampened – rather than amplified – short-lived but significant financial market volatility. And those banks must be resilient because they can no longer rely on the support of the state. This week the Financial Stability Board proposed to G20 Leaders a landmark agreement on the Total Loss Absorbing Capacity which is central to ending Too Big To Fail in the banking system. Once implemented, it will ensure that large financial institutions can fail without disrupting the financial system or calling on taxpayers to bail them out. The era of heads-I-win; tails-you-lose capitalism is drawing to a close. Complex webs of derivatives are being simplified and made safer. We are also working to turn the tide of ethical drift. Market benchmarks have been reformed to end abuse. Most importantly, market participants are being made accountable for their actions. Misconduct will be met with genuine penalties. By holding individuals accountable, authorities are ending the Age of Irresponsibility. The best in industry are playing a leading role, for example, by getting the FICC Markets Standards Board up and running. The Board will establish clearly understood standards, keep them up-to-date with market developments and promote adherence. In parallel, the Banking Standards Board is promoting higher standards of conduct and competence across the UK banking sector. To give these measures teeth, Her Majesty’s Government is extending the Senior Managers Regime to all firms in FICC markets and putting them on a common basis with banks and insurers.

Mark Carney: Introduction to the Open Forum Introduction by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, to the Bank of England Open Forum, London, 11 November 2015. *  *  *  Thank you, Lord Mayor for your extraordinary service this past year and for your gracious hospitality today. Welcome, everyone, to the Open Forum. In a building that started its life in 1411 as “a little cottage”.1 And which has become the place to bring people together: Livery companies and businesses, Traders and market makers, World leaders and citizens. Today, we draw inspiration from this great tradition by gathering representatives from across civil society to discuss how to build the real markets of tomorrow. The Bank of England has a statutory responsibility to protect and enhance the stability of the financial system in the UK. Therefore, even if we don’t regulate markets per se, we have a close interest in working with others to create real markets that enjoy the trust of society whilst effectively allocating capital and risk. Markets can be powerful drivers of prosperity and security for all. Financial markets matter. By financing firms to hire, invest and expand, markets drive growth. By opening up cross border trade and investment they create new opportunities for businesses and savers. By transferring risks to those most willing and able to bear them markets help households and investors insure against the unexpected.
Taken together these two features mean publicly accessible data are a public good.4 In addition datasets can produce additional insights quite distinct from the question they were originally created to answer – they generate positive externalities. And the analytical value produced by combining two datasets can be more than the sum of its parts – there are economies of scope in data. 1  For more on this see Mark Carney’s recent speech at the University of Toronto’s Machine Learning and the Market for Intelligence Conference: Carney, M (2018), “AI and the Global Economy”, slides available at https://www.bankofengland.co.uk//media/boe/files/speech/2018/ai-and-the-global-economy-mark-carney-slides.pdf. 2 I set out the Bank’s approach to fintech in a speech at the Treasury’s International Fintech Conference in London earlier this year: Ramsden, D (2018), “Open to Fintech”, available at https://www.bankofengland.co.uk/-/media/boe/files/speech/2018/the-bank-ofengland-open-to-fintech-speech-by-dave-ramsden.pdf 3 Indeed “AI and Data” is one of the four “Grand Challenges” identified in the Government’s Industrial Strategy. Details available at https://www.gov.uk/government/topical-events/the-uks-industrial-strategy. 4 There is a longer discussion on this in HM Treasury (2018), “The Economic Value of Data”, available at https://www.gov.uk/government/publications/the-economic-value-of-data-discussion-paper 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  But like oil, data must be refined and cleaned in order to be used, and in this regard not all data is created equal. Unstructured, non-standardised and siloed data can be challenging to interrogate for insight, and significantly reduce the efficiency and effectiveness of automated processes. In banking and finance, and in particular in payments, data standards are a foundation for providing critical economic functions.

You must continue to organize and support the necessary training and mentoring of supervisors so that a pool of capable and technically sound personnel is always available and that greater reliability may be placed on their output. During today and tomorrow several papers will be presented on a variety of sub themes and I anticipate that at the end of this conference some critical imperatives would have been identified to steer us through the current challenges and others looming on the horizon. Our confidence in the role of the CGBS has never been misplaced. I wish you all successful deliberations and trust that your stay here will afford you the opportunity to discover for yourself the beauty of our country and the warmth of the Guyanese people. Welcome once again to all. BIS central bankers’ speeches  3
Conclusions Global growth has been very strong in the last few years and global financial conditions have been very favorable for emerging markets. This prosperous period has been used in some countries to improve public finances, while certain countries have not made much of a progress. If some of the risks mentioned today materialize, global growth and global risk appetite may decline and many emerging markets will find it harder to maintain a high growth rate. It is therefore of utmost importance  15  Convergence Programme. 2005 Update, January 2006. 16  Council Opinion of 14 March 2006 on the updated convergence programme of Poland, 2005-2008 (2006/C 82/12). 4  BIS Review 61/2006  that necessary reforms are introduced as early as possible to get ready for a possible global headwind. Thank you for your attention. BIS Review 61/2006  5

Today I want to explain why, despite recent events, I believe that inflation targeting should remain a mainstay of macroeconomic policymaking in the UK. But we have to learn from the crisis, and I will discuss my views on the way in which the policy framework needs to be strengthened. I will conclude with a brief review of our asset purchase programme and, in particular, respond to some of the comments made about the programme. 1. Inflation targeting in action  Over the past year, the Monetary Policy Committee (MPC) has responded to the dramatic deterioration in the economic outlook with an equally dramatic easing in monetary policy. Bank Rate was cut by 4.5 percentage points in just six months and by 1.5 percentage points in November last year alone. That was the largest cut for 25 years and is twice the size of any reduction made by another G7 central bank in the past eighteen months. The MPC also voted to purchase £ of assets financed by the issuance of central bank money – equivalent to around 9% of annual UK GDP. The scale of the easing took many by surprise and some of the decisions may, at first blush, look rather courageous. Those of you who remember “Yes Minister” may recall that Jim Hacker, the hapless minister, became very nervous whenever Sir Humphrey suggested his decision was “courageous”. Central bankers can have similar instincts.
Over the years, the risk areas and thus the scope of regulations to prevent the use of the financial system as a conduit for illegal and other undesirable activities that can pose threats to global security have also increased. From money laundering to terrorist financing, the regulations and standards are being extended to comprehensively address new and emerging threats. This is evident in the ongoing review of the Financial Action Task Force (FATF) 40+9 Recommendations, where among others, several policy goals and initiatives for combating corruption, and addressing proliferation financing more effectively, are being thoroughly discussed and deliberated. A major development in the review of the standards, that is relevant to the industry, is the higher emphasis that will be placed on assessing the effectiveness of measures implemented to counter the risks of money laundering and terrorist financing, rather than merely looking at technical compliance. This is indeed very relevant to the theme of this year’s conference “Raising the Bar in Compliance and Enforcement”. As Malaysia’s AML/CFT regime grows in maturity, the benchmark for compliance by financial institutions will be measured more in terms of its effectiveness in deterring and preventing financial crimes before they occur, and in effectively supporting the relevant law enforcement agencies to bring the perpetrators to justice when such crimes happen, despite our best efforts.

This is also in line with expectations in the money and foreign exchange markets. The interest rate was last raised in March. In line with the forecast in the March Inflation Report, there are prospects of another interest rate increase in the second quarter – at the monetary policy meeting in May or June – and a further increase thereafter. 2  BIS Review 39/2006  Conclusion Increased globalisation and the ensuing terms of trade improvements have exposed the Norwegian economy to a significant upward income shock. This has amplified the domestic upswing. So far, however, strong growth impulses have not led to major imbalances in the labour market or strong upward wage and price pressures. This may be seen as an indication that the macroeconomic framework, most notably the fiscal and monetary policy regimes, has been quite successful so far in shielding the Norwegian economy from excessive fluctuations. More importantly, as long as we adhere to the macroeconomic framework, it will shield the economy when oil prices eventually fall and our terms of trade are reversed. Thank you for your attention! BIS Review 39/2006  3
The chart shows an unweighted average for those institutions in the sample for which data are available on the given day. (b) The “no crisis” institutions are HSBC, Barclays, Wells Fargo, JP Morgan, Santander, BNP Paribas, Deutsche Bank, Crédit Agricole, Société Générale, BBVA, Banco Popular, Banco Sabadell, Unicredit, Banca Popolare di Milano, Royal Bank of Canada, National Australia Bank, Commonwealth Bank of Australia and ANZ Banking Group. The chart shows an unweighted average for those banks in the sample for which data are available on the given day. (c) The dotted black line is a suggested trigger level for contingent capital calibrated by minimising a loss function which takes into account both Type I and Type II errors. Type I error is the probability that conversion occurs despite capital not being required. Type II error is the event that conversion does not occur despite capital being required. The loss function places greater weight on Type II errors. Note that the loss function takes into account the full range of banks, not just the average score for each set.

Chart 4: Tier 1 capital ratios to absorb trading book losses 12.00% 10.00%  11.02% 8.86% 8.73%  10.01% 8.94% 7.42%  8.00%  9.50%  7.56%  6.00%  Original Required  4.00% 2.00% 0.00% HSBC  RBS  Barclays  LBG  Sources: Published accounts, Capital IQ and Bank calculations (a) The red bars show the Tier 1 capital ratios that would have been required at end-2007 to fully absorb trading book write-downs and leave the bank with the Tier 1 capital ratio that was actually reported (blue bars). BIS central bankers’ speeches  13  Chart 5: Tier 1 capital ratios for “crisis” and “no crisis” banks 10.0% 9.0% 8.0% 7.0% 6.0% 'No crisis' banks 'Crisis' banks 8% threshold Lehman failure 15 Sep 08  5.0% 4.0% 3.0% 2.0% 1.0%  Nov 08  May 08  Nov 07  May 07  Nov 06  May 06  Nov 05  May 05  Nov 04  Nov 03  May 04  Nov 02  May 03  May 02  0.0%  Sources: Capital IQ and Bank calculations (a) “Crisis” banks are a set of major financial institutions which in autumn 2008 either failed, required government capital or were taken over in distressed circumstances. These are RBS, HBOS, Lloyds TSB, Bradford & Bingley, Alliance & Leicester, Citigroup, Washington Mutual, Wachovia, Merrill Lynch, Freddie Mac, Fannie Mae, Goldman Sachs, ING Group, Dexia and Commerzbank.