samchain/econo-pairs-v1 huggingface dataset:
And where the system needs strengthening as a whole, we can change capital requirements to put additional resilience in, either across the board through countercyclical requirements, or to particular sectors, through sectoral capital requirements. We are matching the strength of the banking system to the scale of risk it faces, so you can be more confident that credit will be there when you need it. Resilient underwriting standards We have to nurture more than the resilience of the banking system. Your balance sheets have to be resilient too. Over-gearing of your industry has been a major driver of instability in the past, making you vulnerable to the slightest change in sentiment. In part that’s the result of lenders offering deals in the good times that present even the most responsible investors with an impossible choice: gear up to uncomfortable levels or be forced out of the market. To avoid that Hobson’s choice, any slipping of lenders’ standards has to be addressed. That’s why we’re now reviewing the standards of major lenders regularly. 1  2  Carney M (2014) “The future of financial reform”, presented at a Monetary Authority of Singapore Lecture, November 17, 2014. BIS central bankers’ speeches  This year we found loan-to-value ratios rising and interest cover ratios falling, but from a very conservative starting point. We’ll keep watching this, and there will be a new survey in coming months. We know that the importance of major UK lenders in financing you has almost halved since the crisis.

And in this, the measures I’ll outline this evening constitute one aspect of a broader post-crisis endeavour to build, and maintain, a financial system that supports, and does not disrupt, the real economy. It goes by the name of macroprudential policy. Banking system resilience The first step to nurturing a resilient environment is to reduce the prospect of a sudden crunching of credit supply from an injured banking system. In the financial crisis, as banks were holed below the waterline and new lending seized up, the flow of new lending to commercial property collapsed to a third of its earlier level. Since the crisis, the Bank of England has been building a safer banking system. Measured on a consistent basis, major banks hold 10 times more capital than they did before the financial crisis1. And through stress testing, we’re making sure they’re able to withstand severe stresses. By withstand, I don’t just mean survive. I mean continue to lend, including to you. Last year, we tested whether the banking system could withstand a snap back of long-term interest rates, a sharp fall in residential and commercial real estate prices, and a deep recession – all without cutting lending. This year we’re testing whether they can withstand a synchronised, sharp slowdown in China, emerging markets and Europe, and sharp falls in asset and commodity prices – all while increasing lending to the UK real economy by 10%. We showed last year that, where the tests say a bank needs more capital, we’re prepared to take action.
On the basis of these data the Central Bank reduced its growth forecast for 2017 to 12%, compared to 1.5-2.5% in December. At the same time, for 2018 we are expecting the economy to grow between 2.25 and 3.25% (Table 1), based on the fact that the economy does not appear to have any relevant imbalances, the mining-related investment adjustment is expected to end, and a more favorable external outlook. Fiscal policy is assumed to follow the fiscal consolidation path announced by the Government. Table 1 Domestic scenario (annual change, percent)  2015  GDP Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports Current account (% of GDP) Gross national saving (% of GDP) GFCF (% of nominal GDP)  2.3 2.0 1.7 -0.8 2.4 -1.8 -2.7 -2.0 21.4 23.6  2016 (e) Dec.16 Mar.17 Report Report 1.5 1.1 2.0 -0.6 2.8 0.1 -1.4 -1.7 19.3 22.2  1.6 1.1 2.0 -0.8 2.8 -0.1 -1.6 -1.4 20.2 23.2  2017 (f) Dec.16 Report  Mar.17 Report  2018 (f) Mar.17 Report  1.5-2.5 2.6 2.0 0.7 2.4 2.0 4.1 -1.9 19.2 21.7  1.0-2.0 2.3 1.9 0.2 2.5 1.6 4.3 -0.9 20.3 22.5  2.25-3.25 4.1 2.8 3.0 2.8 2.7 7.2 -2.1 20.5 22.6  (e) Estimate. (f) Forecast. Source: Central Bank of Chile. 6  15. Our base scenario assumes that monetary policy will remain accomodative throughout the policy horizon.

For example, the leading global fund managers recently indicated that they consider sustainability to be a core criterion for investment selection, given that sustainable portfolios could offer higher risk-adjusted returns and that companies that follow sustainable criteria may have greater potential for success in the medium term. Let me finish my address by highlighting that there is still some considerable distance between expectations and the reality of the data at hand, but also that the pace of change is very brisk. Standards are and will always be imperfect, but this is no excuse for us not to try to move forward. Thank you. 4
Mr. Chairman, in a strange and a paradoxical sort of a way, it is somewhat “fortunate” that the current financial crisis shocked (and indeed, almost ruined) the worlds financial system, at the present stage of evolution of the worldwide financial landscape. If, on the other hand, this crisis had not impacted us at this time of history and consequently we had happily progressed at the same pace for a further 10 years or so, and then in 2017 or 2018 this shock had hit us, can anyone imagine the magnitude of the disaster at that time? In fact, I am quite sure that, if that eventuality had taken place, this crisis would have been too much for the world’s financial system to bear, and the resulting catastrophe would have crippled the world’s financial systems, as well as the world’s political, security and social systems with disastrous consequences. Perhaps some keen film maker might even consider doing a simulation of such a scenario, and then making a gripping and horror filled movie, allowing those of us with horror appetites to experience such a dreadful tragedy! Mr. Chairman, while we are putting into effect various initiatives to improve our processes and procedures to respond to the crises, we must also be conscious that we should not throw the baby out with the soiled bath water. Yes, the bath water has been terribly muddied and needs to be replenished. However, at the same time we must realize that the baby although rather dirty, is still quite wonderful.

The embarrassing summersaults that various governments had to perform by unceremoniously ditching some of their most sacred and fundamental policies, have also been better understood, by many communities. Now, what is needed is to move forward decisively within this new paradigm. To do so effectively, we have to essentially place some barriers to deal with unsustainable risk taking. The freedom of the wild ass that supported unfettered and reckless economic actions to create things out of nothing has to be dealt with. At the same time, we need to revisit some of the fallacies that developed over the last decade or so, including those that indirectly said: “Don’t worry too much about a few bubbles”; “markets are always right”, “innovation should not be discouraged”; “state intervention is dangerous”, etc. In a way, some of these positions perhaps prompted a kind of an unconscious regulatory anarchy! The resulting subdued regulatory reactions were of course exploited by the greedy market and the rest is history! This time round therefore, the wisdom of such concepts and absolute reliance on them, would need to be critically reviewed. What then should we do? Maybe, we could start by making a “Wish-list”, and then moving towards making a “To-do list” to realize such wishes. What could we wish for? First, perhaps we should wish for effective “immunization” mechanisms to safeguard national financial systems from the contagion effects of globalized viruses and cross border toxic elements.
The crisis intensified in spring and summer 2012 amid growing fears that one or more member states may leave the euro. Refinancing costs in the affected countries climbed and  BIS central bankers’ speeches  1  uncertainty among economic agents rose considerably. Owing to the fact that the Swiss franc was highly sought-after in its role as a safe haven currency, the deepening of the crisis triggered strong upward pressure on the franc. Particularly in the critical months of May to August, the only means of enforcing the minimum exchange rate was through extensive foreign currency purchases. Overall, the SNB purchased foreign currency last year to the value of CHF 188 billion. The SNB was well-prepared from the outset for the enforcement of the minimum exchange rate. Since its introduction, we have been monitoring the foreign exchange markets round the clock, from when they open on Sunday evening in Sydney to when they close on Friday evening in New York. In order to achieve the required effect on the exchange rate, we conduct foreign exchange transactions with a wide range of domestic and foreign counterparties. With a network of well over 100 banks from around the world as counterparties, we cover the relevant interbank foreign exchange market. The foreign currency purchases made in 2012 led to a significant rise in our foreign currency holdings. The increased volume also resulted in a considerably higher level of financial risks on our balance sheet. Yet these foreign currency purchases were necessary.

Gold as part of the Swiss National Bank’s currency reserves In my following remarks, I would like to speak about the subject of gold as part of the SNB’s currency reserves. As reported in the media last week, the so-called gold initiative has formally qualified for a referendum vote to be held. This popular initiative demands that the SNB hold at least 20% of its assets in gold, that it be prohibited from selling its gold reserves and that all gold reserves be physically stored in Switzerland itself. The SNB does not generally comment on any political initiatives. However, the gold initiative has a very direct impact on the SNB’s capacity to act. This is why we are taking the opportunity today to present our viewpoint for the first time on the demands of the initiative. The initiators see a high level of gold reserves as a guarantee for currency stability. They fear that the Swiss franc will decline in value and that price stability will be threatened if a large proportion of the balance sheet does not consist of gold holdings. They are also concerned that the SNB’s gold reserves held abroad are not secure and will not be accessible in critical situations. We share the objectives the initiators put forward, such as maintaining currency and price stability and ensuring both the SNB’s capacity to act and its independence. However, the measures proposed to this effect are not suitable; in fact, they are even counterproductive.
Although the interbank rates, that is, the rates banks pay when borrowing from one another, have fallen they are still much higher than the average rate in recent years. The TED spread in the United States and the euro area is for example three times higher than the average. The housing market in the United States has not yet bottomed out. If new large loan losses arise in the financial system again this may shake market confidence once again. Over the past few days a large amount of new information has been received regarding the situation in the US economy. Inflation in the United States remains high. This is largely due to the increasingly high food prices, as well as high energy prices. However, the rate of wage increase has slackened. Inflation in the euro area is also affected by the higher energy and food prices. However, growth appears to have been stronger than we had expected for the United States in the most recent quarter, as well as in the euro area, particularly Germany. At the same time, there are indicators for both the United States and the euro area pointing to a slowdown in the second quarter. International developments affect us all, both you as entrepreneurs and Sweden as a whole. We have assumed that foreign trade will slow down in the future, as world growth is expected to continue slackening. Orders from the export market have so far declined in 2008.

Commodities are priced in dollars, and this may mean that commodities exporters will try to gain compensation through higher prices if the dollar falls. In recent years, portfolio investment in commodities has become an increasingly common means of diversifying and spreading risks. The fact that interest has increased is due to the return on other investments deteriorating and this has probably contributed to reinforcing the upswing in commodity prices. If the expectations of the relative return on this type of investment were to decline, it could instead have a subduing effect on prices. How does one weigh together all of the factors I have mentioned? There is of course considerable uncertainty. The assessment we made at our last monetary policy meeting was that the world market prices would not continue to rise at the same rapid rate. This meant that the high inflationary impulses from the price rise on food commodities were assessed as  4  See Irma Rosenberg, “Rising commodity prices”, speech held on 9 May 2008. 5  IMF (2008) World Economic Outlook. 6  See the UN’s climate panel 2007: Impacts, Adaptation and Vulnerability. 4  BIS Review 68/2008  partly temporary. This is something that is so far supported by the tendencies towards a slowdown in food commodities prices in the world market which we have been able to see recently. Information received since the last meeting I now intend to move on to say a few words about the information received since the most recent interest rate decision.
So far as foreign banks operating in Hong Kong are concerned, Hong Kong political risk largely seems to have disappeared as an issue. We have seen no exodus of banks from Hong Kong; rather, we have seen an increased appetite among the foreign banks to take on long-term HK dollar assets, including residential mortgage loans and syndicated credits. Although the margin on these have come down significantly over the last year, they are still attractive compared with the margins available to foreign banks in their home countries. The importance of international regulatory standards We do not anticipate any radical changes in Hong Kong’s system of banking supervision after 1997, nor in its attitude to the entry of foreign banks. No doubt, however, these will evolve in line with trends in global regulation. This reflects the guiding principle of our supervision in Hong Kong which is to follow international standards. There are a number of practical reasons for wanting to do so. First, it is in keeping with Hong Kong’s role as an international financial centre. Reputable foreign banks will only want to do business in a market where the rules of the game are familiar and credible. Their home supervisors will certainly feel the same way. There is thus absolutely no advantage for centres such as Hong Kong to compete on laxity or to market themselves as places where dubious transactions can be conducted and concealed.

Regulatory cooperation in Asia These initiatives are being supplemented in Asia by regional cooperation on both a bilateral and multilateral basis. There have been a number of factors driving this. The aftermath of the Mexican crisis in January 1995, which saw speculative attacks on a number of Asian currencies, encouraged the view that there was a need for countries in the region to strengthen their defences in this area. We have thus seen the arrangement of an interlocking series of bilateral repo agreements using US Treasuries between Asian central banks, including the Hong Kong Monetary Authority. These agreements are intended to provide additional liquidity for exchange rate stability purposes. More generally, there has also perhaps been a feeling among the Asian countries that the existing arrangements for central bank cooperation were somewhat “euro-centric” and did not take adequate account of the growing importance of the Asian region where over 40% of the world’s foreign currency reserves are now held. This feeling has to some extent been addressed by the more participative approach now being adopted by the Basle Committee and the BIS. But there is nonetheless a view that greater regional cooperation among Asian central banks is both necessary and desirable. This has been summed up in the concept of an “Asian BIS”, though this is somewhat misleading as there are no immediate plans to move towards the BIS Review 55/1997  -4-  institutional structure which the name would imply.
In addition, the damage from the sharp stock market decline was mitigated by the Federal Reserve’s commitment “to serve as a source of liquidity to support the economic and financial system.”5 A contrasting example is the sharp appreciation of the dollar that began in 1978 and reached a peak in March 1985. The persistent strength of the dollar had a significant negative consequence for U.S. trade performance. Our trade deficit widened sharply in 1985 and 1986, which contributed to the sharp slowdown in U.S. manufacturing production growth—and a milder slowdown in GDP growth—over this period. This leads to an important question: When should the FOMC take changes in financial conditions into consideration in its conduct of monetary policy? I don’t think there is a simple answer. Financial conditions matter in influencing the economic outlook, but so do many other factors. It is true that monitoring financial conditions can help improve the effectiveness of the policy decision-making process. However, as I hope is clear from my previous examples, there is no mechanical link between policy rates and financial conditions that monetary policymakers can systematically rely upon to set policy. Another key question is what one should focus on in assessing financial conditions. Again, I don’t think there is a simple answer, as the significance of any particular aspect of changes in financial conditions depends on the economic circumstances and environment. In the early- to mid-2000s, the combination of looser mortgage underwriting practices and home equity withdrawal were major financial factors contributing to that economic expansion.

My view is that reducing the Federal Reserve’s balance sheet and raising short-term interest rates are two different, yet related, ways of removing monetary policy accommodation. Therefore, I would expect that, when we begin to end reinvestment, we will have to consider the implications for the appropriate short-term interest rate trajectory. In conclusion, financial conditions are important. They matter enormously to monetary policy because their movements can often diverge from the trajectory of short-term rates, and because they affect economic activity and the economic outlook. While it is essential to account for financial conditions appropriately in conducting monetary policy, it is also important not to overreact to every short-term wiggle in financial markets. In addition, it is important to remember that the policy goal is not the level of financial conditions per se, but the achievement of the Federal Reserve’s dual mandate objectives. Sometimes, that will be consistent with easing financial conditions, and at other times, it will be consistent with tighter financial conditions. At all times, our focus will be on achieving our objectives of maximum sustainable employment and price stability, thereby supporting the livelihoods of households and businesses throughout the United States. Thank you for your kind attention. I would be happy to take a few questions. 1 Ozge Akinci, Nicola Cetorelli, Richard Crump, David Lucca, Jonathan McCarthy, Paolo Pesenti and Joseph Tracy  assisted in preparing these remarks.
In the decade that followed that honour, the UK has been through a searing financial crisis and a recovery that has been even slower than that following the Great Depression. Once the financial system was fixed, however, the UK became, until recently, the fastest growing economy in the G7. Unemployment nationwide has fallen from 8.5% to 4.3%, a 42-year low. In Liverpool, the unemployment rate has declined steadily to 4.7% today, around 2 percentage points below its pre-crisis rate. The recovery here is being aided by further regeneration, both economic and physical – building the infrastructure that will enable businesses and households to flourish. These efforts are building on past successes, with Liverpool now home to many award-winning museums including the Museum of Liverpool, the International Slavery Museum, and Tate Liverpool. Liverpool Council is working in partnership with businesses and other organisations to exploit the best of what each can bring. For example, Liverpool Council, Liverpool FC and Your Housing Group are working together to bring new vibrancy to the Anfield area. I personally heard last night about some of the great work that Everton in the Community are doing to tackle problems like homelessness and boost educational attainment. And the club of course has ambitious plans for a new stadium at Bramley Moore dock. Liverpool’s Science Park provides office space alongside commercial labs, right at the heart of the city’s Knowledge Quarter.

TLTRO’s and the tiering system we use today for refinancing the Eurozone banks are two good examples in this respect. On climate change, the emphasis put by Christine Lagardeix herself is welcome and totally warranted. In my view, the fight against global warming is already an imperative for us under our price stability mandate: not only will the effects of climate change have significant repercussions on future inflation and growth, but they are already having an impact now. We could implement our climate decisions in no more than 3 to 5 years, which would make us pioneers among major Central banks. Page 8 sur 10  4. How to improve communication with the general public? My final remarks concern communication. Central banks have come a long way in being transparent about their decisions and explaining their reasoning. However, our communication is too often addressed to a narrow group of people – the media, the markets and economists. We need to do a better job of reaching the general public. And this means two changes of paradigm:  it is not only a question of democratic accountability – however essential this remains –, it is also key for our economic efficiency. Better-informed firms and households will also make better decisions and ones more aligned with our strategy, I will come back to it.  Secondly, we should evolve from a narrow objective of “transparency” to a wider objective of “clarity”.