samchain/econo-pairs-v1 huggingface dataset:
For securitization markets, the U.S. Congress as well as regulators are considering changes to ensure incentives are properly aligned and that there is sufficient transparency around the underlying assets. For the housing GSEs, reforms are beginning to be crafted to reach an  BIS Review 40/2010  5  appropriate model, as described in the testimony by U.S. Treasury Department Secretary Geithner earlier this week. For OTC derivatives, financial reform legislation contains provisions to increase the transparency of the market and to clear trades through central counterparties. For the triparty repo market, a task force is considering recommendations to make the market more robust to weather financial strains among its participants. And for money market mutual funds, the U.S. Securities and Exchange Commission has offered a reform proposal to better prepare those institutions for abrupt changes in investor demands. As you can see, the efforts are extensive and affect many different areas. Together, they should be aimed at achieving some common goals. We should have a system in which regulatory arbitrage is not the primary driver of where or how financial activity or innovation takes place. We should have a system in which government support is well defined and is priced correctly. We should have a system in which investors receive adequate, accurate and timely information to make independent judgments about credit risk through the life of a security. And we should have a system that ensures adequate capital and liquidity standards for firms with deep and intertwined linkages to the financial markets.

Instead, discussion should be focused on how to make the use of leverage less procyclical, to identify those sources of leverage that are most productive and to better monitor the vulnerabilities that can result from excessive leverage. Conclusion The crisis offered a rare view into how our capital markets function under extreme stress. Those circumstances revealed vastly different degrees of robustness across alternative segments of our financial system. At one end of the spectrum, markets for certain dollar assets demonstrated considerable resilience to financial stress and were extremely appealing to investors in stress circumstances. At the other end, the crisis highlighted that segments of U.S. credit markets had structural shortcomings that must be addressed to ensure the viability of these markets going forward. Those shortcomings have necessitated two waves of policy response. The first wave was aimed at putting out the fire. To that end, the crisis demonstrated that U.S. and global authorities have the ability and willingness to respond in a manner that meets dollar funding needs in a time of crisis and that promotes broader market stability. The second wave is aimed at building a sounder financial system for the future. Those efforts are still underway, and the reform process may be long and involved. However, I am hopeful that many of the shortcomings are likely to be addressed, and that we will emerge from this episode with a more robust and efficient financial system. BIS Review 40/2010  7
http://www.bankofengland.co.uk/publications/Pages/speeches/2013/679.aspx  8  BIS central bankers’ speeches  Annex: Charts Chart 1: UK CPI inflation  Chart 2: Recoveries across the G7 Per cent  Index (pre-crisis preak =100)  108  6  106  5  104  4  102 100  3  98 Germany France Italy UK US Japan  2 1 0 2005 2006 2007 2008 2009 2010 2011 2012 2013  96 94 92 90  2007  2008  2009  2010  2011  2012  2013  Sources: Eurostat and Datastream The pre-crisis peak was: 2008 Q1 for Germany, France, Japan and the UK; 2007 Q3 for Italy; 2007 Q4 in the US; and 2008 Q3 for Canada. Chart 3: UK labour productivity Percentage change on five years earlier  25 20 15 10 5 0 1861  1886  1911  1936  1961  1986  2011  -5 -10 -15 -20  BIS central bankers’ speeches  9

After a thorough examination by a team of international experts, our financial system was certified as being healthy, well supervised in the context of a comprehensive legal framework, and strongly compliant with most of the relevant international standards and codes. We cannot, of course, afford to be complacent. A good reputation takes time and considerable effort to earn, but can easily be lost. It is the joint responsibility of the CBM and the MFSA, the credit institutions and the other financial service providers, and of all market participants, including the financial lawyers and accountants, to ensure that Malta’s financial centre remains synonymous with integrity, efficiency and reasonable costs. I emphasize this point because the recent rapid growth in the depth and breadth of the financial sector, and the expectation of further expansion, has sometimes given rise to behaviour - such as the use of aggressive methods to induce prospective customers to buy financial products and services and the resort to misleading advertising - which stretches the interpretation of our laws and regulations close to their limit. There should be no doubt in anybody’s mind that the CBM and the MFSA, acting in the common interest, will continue to exercise their respective responsibilities with diligence and rigour to ensure the integrity and stability of the financial system. In conclusion, I would like to wish Mediterranean Bank success in their Malta venture and to express the hope that their presence here will also serve to enhance the reputation of our financial centre. 2  BIS Review 92/2006
The level of interest rates is anchored in an underlying equilibrium rate of interest determined by economic fundamentals on both the supply and demand side of the economy. This equilibrium rate of interest is the hypothetical interest rate that would sustain demand in line with supply, and inflation at target. We call it r*. The equilibrium interest rate is a theoretical concept we can use to organise our thoughts. A useful framework for understanding it was set out by the Monetary Policy Committee back in August 2018. At the core of it is a distinction between the actual level of the equilibrium rate, r*, which moves around with cyclical factors acting on the economy, and its longer-run trend component, R*, which moves more slowly with underlying structural factors in the economy. The equilibrium rate, r*, in other words, fluctuates around its long-run trend, R*, as a result of shorter-run influences on the economy. Neither r* itself not its trend component R* can be directly observed, and we cannot use them as a direct guides. But to the extent that they can be estimated, they may help us explain the evolution of interest rates over the past and inform our assessment of where interest will go in the future. Let me explain this in a bit more detail.

Bank of England  Page 5  One of the most striking global trends over the past half century has been an overall decline in the level of risk-free interest rates – risk-free in the sense that they are returns on lending that carries a negligible risk that payment obligations will not be met by the borrower. Chart 1 shows how, when we look at this over a longer period of time, ten-year UK nominal rates have fallen compared to where they were in the 1980s. Both the very low levels of interest rates we have seen in the years leading up to the Covid pandemic, and their recent rise from those levels, must be seen against the backdrop of that downward trend. Chart 1: The UK ten-year nominal rate has fallen over recent decades Ten-year zero coupon yield (spot interest rate) from UK gilts (a) Per cent 15  15  10  10  5  5  0  0  -5 1985  -5 1990  1995  2000  2005  2010  2015  2020  (a) Sources: Bloomberg Finance L.P, Tradeweb and Bank calculations. A good part of this decline can be explained by lower inflation itself. It reflects the success of inflation targeting in delivering low and stable inflation over long periods of time. Under inflation targeting, monetary policy makers act decisively to return inflation to target whenever shocks cause prices to rise or fall by too much.
Eichengreen, B. and K.H. O’Rourke (2010), “A Tale of Two Depressions: What do the New Data Tell Us”, in http://www.voxeu.org. Rancière, R., A. Tornell and F. Westermann (2008), “Systemic Crises and Growth”, Quarterly Journal of Economics 123(1): 359–406. BIS Review 84/2010  5

In this regard, there is broad consensus that the reform should be aimed at reducing the number of rules around a single objective (reducing debt) and an operating rule (the spending rule), so as to ensure that public spending does not exceed nominal long-term GDP growth and that it stays below it in countries with high levels of debt. Moreover, beyond the simplification of the fiscal framework, it would also be necessary to move towards more automatic implementation, so as to avoid excessively discretionary application. European financial architecture reforms also notably include those relating to the completion of a full-fledged Banking Union in the euro area. The cornerstone pending approval for this 9  Union is a fully mutualised European Deposit Guarantee Scheme. In this regard, it is worth reiterating here that the financial channel, and the credit channel in particular, should be a means of risk-sharing among private agents in the European economy to complement and reinforce the public channels I mentioned earlier. Moreover, these private channels are particularly important in episodes of deep-seated economic contraction, insofar as they mitigate the possibility of these episodes posing an element of financial instability that would only prolong and exacerbate the contraction. In my opinion, the early announcement of a credible commitment to the full completion of the Banking Union, even were it to come about at a later date, would be a decisive contribution to ensuring euro area financial stability, both in the coming months and over a medium-term horizon.
The majority of financial sectors are in foreign hands, well capitalized and well managed. Institutions from the EU are governing the largest financial institutions in the new member states. Introduction of the Single Passport policy will mean a change only de iure, not de facto. Foreign institutions that wanted to provide their services in the new member states are already present there. I do not expect any rush of new players to the new countries of the European Union. It is more probable that with increasing living standards of the population, the space for new financial products’ penetration will increase as well. I expect to see increased competition in this area, as already established institutions compete for new clients. It is unlikely that many new financial institutions will enter the market, because the market is already saturated, and players who had a strategic interest in Central Europe have already established themselves. Authorities from the new countries are already participating in committees and working groups established by the European Commission and European Central Bank, so that rules, as well as the policy thinking are being coordinated and harmonized. Challenges from the EU accession will therefore not represent any major risk.

However, the majority of these non-banking financial intermediators is controlled by financial groups headed by commercial banks. A relatively low share of investment companies and investment funds were negatively influenced by missing regulation and supervision in this field, however, there has been gradual improvement in recent years. In the area of pension funds we also witness gradual improvement caused mostly by government incentives, but we can expect quicker development if the government proceeds with intended pension reform. Increasing Role of NonNon-banking Intermediation 9,0 8,0 7,0 6,0 Insurance C. Financial Leasing Investm ent C. Pension Funds Other Credit Unions  5,0 4,0 3,0 2,0 1,0 0,0 1996  Total  1997  1998  1996 21,2  1999  1997 17,9  2000  1998 18,6  2001  1999 20,0  2002  2000 19,0  2001 20,6  2002 21,7  10  4  BIS Review 53/2003  The banking sector generally consists of previously state owned banks [since privatized to foreign banks], new banks established after 1990 as private institutions, and subsidiaries and branches of foreign banks. The approach to bank privatization differed in the new member states, but the results are now rather comparable. The banking sector is dominated by institutions governed by foreign banks [mainly from the EU], with exceptions being Slovenia, Malta and Cyprus.
During this process, we have been assisted and overseen also by important international financial institutions such as the World Bank and the International Monetary Fund. Beyond the non-performing loans issue, the banking system continued to be well capitalised, liquid and financially sound. The issue of non-performing loans will require some more time to resolve, but this should not keep us from the recovery of the credit activity at home. For as long the positive performance of the other above-mentioned indicators continues, the banking sector has room and the potential to credit convincing projects and investments. In my judgement, it is important to administer with courage and persistence the prevalent perception that non-performing loan have forced banks to adopt a very conservative approach to lending. To permanently address this problem, additional measures have been taken and will be taken in the future. I would like to briefly focus on the latest initiative in this regard: a coordinated plan between the Bank of Albania, Government of Albania, Association of Banks, and International Monetary Fund, consisting in two main pillars: The first pillar relates to the drafting and completing the legislation that regulates lending from the moment of concluding a contract until the final repayment, including disputes among the parties. These changes aim at making more precise in legal terms all procedures related to banking activity, bailiff services, borrowers and other relevant state institutions.

Additionally, we will cultivate further our staff’s ability to evaluate advanced risk measurement and management methodologies for operational risk, especially because so much of that work centers on advanced statistical analysis. Externally, the Committee anticipates providing more assistance, both formally and informally, to other supervisory agencies that are preparing for the added responsibilities we will all assume as the New Accord comes into force. Moreover, I am pleased to note that the Financial Stability Institute will continue its collaboration with the Basel Committee, especially in assisting supervisors globally in understanding and implementing all aspects of the revised Accord. The "FSI" anticipates that more than half of its 40 seminars and programs in 2003 will concentrate on components of the New Accord. In fact, shortly after the release of the Third Consultative Document next year, the FSI intends to offer three special seminars around the world to introduce other supervisors to the most important features of the new framework. 3. Working toward consistent implementation: Accord Implementation Group  The third area of activity will be to deepen the level of communication and cooperation among supervisors so that we implement the new rules more consistently across jurisdictions. A "level playing field" demands that international competition be driven by each bank’s strengths, rather than by each country’s rules. Within the Basel Committee itself, we’ve established the "Accord Implementation Group" as a forum for sharing information on ways to assess risk management processes under the New Accord.
The quantitative limits were defined taking into account the average economic situation prevalent at the end of the 1990s. In particular, annual potential GDP growth of 2% and an inflation aim of around 2%, together with a budget deficit limit of 3% of GDP, would stabilise the ratio of government debt to GDP at 60%. The experience since its approval has shown that the design of the Maastricht Treaty left significant gaps in the governance of the euro area. In particular, these gaps have a significant bearing on the proper functioning of the policy mix. First, due to the simplicity of the framework, the original rules did not take into account that the cyclical position of countries affects the headline deficit. Subsequent reforms tried to address this, at the cost of increasing complexity and relying on (initially praised, but now maligned) unobservable variables. But, in any case, as can be seen in the left-hand chart of slide 3, the experience of recent decades has been one of pro-cyclical compliance with the rules, resulting in undesirable tightening during downturns and insufficient accumulation of buffers during upturns. Moreover, despite its focus on debt sustainability, the framework did not avoid a general increase in debt (as can be seen in the right-hand figure in slide 3), which has, in any case, been a trend common to most advanced economies. Having to deal with multiple objectives (countercyclicality, long-run growth, debt sustainability), fiscal policy, in most cases, failed to deliver satisfactorily on any of them.

Under the Maastricht Treaty, the design of EMU had two core elements: an independent common central bank targeting price stability, and a framework to coordinate national fiscal policies. The former was entrusted with monetary policy, while the latter was based on a set of fiscal rules geared towards ensuring that national fiscal policies did not endanger the price stability mandate. This meant that Member States could no longer rely on monetary policy to stabilise asymmetric economic shocks (domestic, or common with highly uneven domestic effects), while the exchange rate could not act as an adjustment mechanism between countries. Instead, they had to rely on additional adjustment channels, such as capital and labour mobility, and, especially, countercyclical fiscal policy. 1  In addition, the set of fiscal rules included in the Treaty acknowledged that the fiscal behaviour of one country would affect the rest of the members and the monetary union as a whole. In particular, unsustainable fiscal policies in one country could generate economic and financial instability across the monetary union and influence the single monetary policy. Thus, the Treaty stipulates that Member States should avoid excessive deficits, and that the European Commission should monitor public finances to identify significant deviations that could endanger the macroeconomic and financial stability of the monetary union. In practice, the Protocol operationalises these principles by means of two quantitative reference values: 60% for the ratio of government debt to GDP and 3% for the budget deficit-to-GDP ratio.
BIS central bankers’ speeches  9  ... making it difficult to maintain price stability and financial stability It is very clear that it will be more difficult for the Riksbank to carry out its main tasks of price stability and financial stability in the event of a substantial fall in prices on the housing market. I shall begin with price stability. If demand grows weakly as a result of a fall in housing prices, we would normally end up with lower inflation. However, if decreasing confidence in the Swedish housing market among foreign investors leads to a general fall in interest in investing in Sweden, we would presumably see a substantial depreciation of the krona, which could strongly push up inflation. It is very likely that uncertainty over the development of inflation would increase. If we go over to financial stability, I can repeat what I have said many times before, which is that financial stability and price stability are interconnected. One reason for this is that if it becomes more difficult for the banks to obtain funding, it will also become more difficult to ‘reach out’ with repo rate changes. We usually describe this as a weakening of the monetary policy transmission mechanism. And this, naturally, makes it more difficult to stabilise inflation around the target. The Riksbank would also have to use its various tools to manage liquidity problems in the banks. We saw this clearly during the acute financial crisis of 2008–2009. I shall now summarise my comments so far.

We now have a situation whereby a proposal for an amortisation requirement from the Government has been sent out for consultation after some unclear legal points arose concerning Finansinspektionen’s previous proposal. 13 Naturally, it is thus even more regrettable that uncertainties have arisen surrounding the legal aspects of the Government’s proposal. The current proposal also only deals with the amortisation requirement –  12  A more detailed discussion about the growth and development of macroprudential policy in Sweden can be found in my speeches held at the Swedish Economics Association in 2014 and 2015. 13  See ”Remissyttrande om Promemorian kring amorteringskrav” (Consultation response to the memo regarding the amortisation requirement), Sveriges Riksbank, published 29 October 2015. 10  BIS central bankers’ speeches  uncertainties remain regarding other loan limitation tools which I consider to be entirely necessary. More on this in a moment. The European Systemic Risk Board (ESRB) issued a recommendation in January 2012 concerning the national mandate for macroprudential policy. In this, the importance is highlighted of the responsible authority having access to appropriate tools to meet its targets. I can only observe that this recommendation has not been implemented in Sweden. We propose measures We at the Riksbank must obviously make a contribution, given our task, and analyse the risks before issuing a proposal for how they should be managed, not least because financial stability is a precondition for price stability.