samchain/econo-pairs-v1 huggingface dataset:
The recent competitive environment has actually fostered the gradual transformation of banking activities, with a greater emphasis on the "originate and distribute" business model. With this model, credit institutions arrange financings but quickly offload a substantial portion of their risks, for example through securitisation, and take payment – much more so than in the past – in the form of fees and commissions. But although activity in new products such as LBOs is helping to boost French banks' revenues and earnings, it is also a source of vulnerability. First, in terms of remuneration, fierce competition among credit institutions is not only exerting downward pressure on margins; it is encouraging "covenant-lite" deals – a worrying trend. These complex transactions are also beginning to generate new risks. On this point, there is a tendency towards longer underwriting periods, during which banks bear the bulk of the risk. Banks should also pay attention to the fact that counterparties such as hedge funds are becoming increasingly involved in this type of deals. Allow me two brief asides, if you will. First, with regard to LBOs, let me refer you to the study appended to the Annual Report. On the topic of hedge funds, I would remind you that the Banque de France devoted a special issue of its financial stability review to this subject and that the Commission Bancaire pays close attention to banks' involvement with this type of counterparty.

This point is particularly important because the Commission Bancaire's decision on whether to authorise the use of certain approaches may hinge on meeting these requirements, which, moreover, tie in with those in the new IFRS. It should be underlined that the Commission Bancaire carries out these activities in close cooperation with other European oversight authorities as a member of the Committee of European Banking Supervisors (CEBS) whose objective is to achieve closer convergence of supervisors' regulations and practices. In this regard, CEBS has set up operational networks, known as supervisory colleges, for major cross-border banks. Composed of the home-country and host-country supervisors of Europe's largest banking groups, these networks make it possible to find pragmatic solutions to the main problems encountered when implementing Basel II. Likewise, convergence of supervisory practices must be also materialised by the filing of the first accounting and prudential reports in FINREP and COREP formats, respectively, which form a common framework for Europe. ** * Let me say in conclusion that over the past year the French banking system has demonstrated its ability to develop new activities and thus find the fresh sources of growth needed to diversity its revenues. But these positive results are not without certain vulnerabilities, given that margins are slim and some complex financings are exposed to both operational risk and model risk. It is therefore necessary to ensure that banks’ balance sheets remain robust. To achieve this, naturally, pricing structures must correspond to actual risk exposure, and risk management techniques must be strengthened.
Rather than building up buffers during “the good times”, increased tax revenues associated with the pre-crisis housing booms were treated as structural rather than cyclical, justified by models demonstrating new growth trends. 2  BIS central bankers’ speeches  Taken together, this meant that some of the euro area countries entered the global financial crisis in an unnecessarily vulnerable position. This explains to a large extent the situation we are now in. However, these policy failures were also made possible by a general failure to acknowledge the new governance responsibilities associated with membership of EMU. Put simply, “keeping your own house in order” is necessary, but not sufficient, in a highly integrated monetary union. It is the responsibility of every euro area government to exercise vigorous and effective mutual surveillance over others’ policies. As a crisis in a country like Greece representing only 2% of euro area GDP can become systemic, disregarding EMU governance may come at a high cost to taxpayers. Yet the latter was the attitude prevailing prior to the crisis. The Stability and Growth Pact – the set of EU level rules for guiding fiscal policies – was never properly implemented. Member States tended to adopt a principle of “non-interference” over each others’ policies. Peer pressure, on which the framework was predicated, gave way to peer support. By watering-down of SGP in 2004–05, the largest euro area countries signalled that they had no stake in the rules.

Our standard and non-standard measures ensure price stability in the euro area. While our standard measures signal the monetary policy stance, our non-standard measures ensure the transmission of the desired policy stance to the real economy in those market segments in which the transmission is impaired. Our non-standard measures ensure that despite increased liquidity demand, financial institutions are able to continue lending to clients. However, misconceptions persist related to the Securities Markets Programme, our programme for intervening in government bond markets. The SMP deliberately addresses the appropriate transmission of our monetary policy to the real economy in market segments which are impaired. Government bonds are crucial for the transmission of monetary policy, via their status as a benchmark for borrowing by banks. Put simply, left unaddressed, the malfunctioning of sovereign bond markets’ could block the bank lending channel. An important difference with Quantitative Easing programmes is that the liquidity injected into the banking system via the SMP is sterilised by the ECB through regular liquidity absorbing operations. The ECB has been widely recognised as an institution capable of timely, decisive and convincing action during tumultuous times. We see this as a mark of distinction. However, it would be erroneous to derive from this that it should be a political institution in charge of running the euro area economy. It cannot be and should not be. The ECB is a central bank, committed to its mandate to preserve price stability over the medium term. It is not the fiscal lender of last resort to sovereigns.
Low domestic cost pressure In other words, the outlook from the autumn has so far remained largely intact, and economic activity is strengthening as expected. The situation is different for domestic cost pressure. In this respect, since the middle of autumn 2003, new data has gradually been received that has warranted changes in our view of the inflation situation. These relate to the labour market, which has been weaker than expected with consequences for our assessments of wage developments, to productivity, which has risen more than anticipated, with lower cost pressure as a result, and finally to actual inflation, which has been lower than expected, with effects also on inflation expectations, which have declined somewhat. Employment growth has therefore been weaker than expected, particularly at the end of last year. The same applies to the number of hours worked. The weak employment growth coupled with a lower number of labour market policy measures has resulted in higher unemployment. This rose from 4.5 per cent in February last year to 6.0 per cent in February this year. Business tendency data and other indicators currently suggest that employment growth in the private sector will be relatively weak in 2004. There are some signs that the labour market may be about to turn, but these are weak. Very recently, for example, the number of new job vacancies has increased slightly and redundancy notices have declined.

·  Second, the New Accord will recognise that some banks treat their smallest business credits as retail exposures. In these cases, banks group and administer their small business loans on a “pooled basis,” similar to the way they manage most small personal loans. The New Accord will permit aggregate exposures to a single business borrower of up to € million to be treated as retail exposures. Because retail exposures enjoy a preferential treatment under both the standardised (reduction of risk weights by 25 percentage points, from 100% to 75%) and IRB (a different risk-weight curve) approaches to credit risk, banks making such loans may face lower capital requirements than are currently applicable. Moreover, for those who have monitored our work closely, the Committee recently eliminated a controversial requirement governing the “granularity” of such loans. In plain language, the rules will no longer require that retail portfolios contain exposures to a minimum number of unrelated parties. Instead, national supervisors will determine whether such portfolios qualify for retail treatment. Although the media has not reported on this change widely, it is quite important because it will help more banks to enjoy the preferential retail treatment for their smallest business credits. 2  BIS Review 32/2003  ·  Finally, the New Accord will recognise a far wider range of collateral and guarantees than the current rules do.
Part of our challenge was to reconcile the UK’s position as an international financial centre with stable banking in the UK. 1  To be clear, I am not referring to any company with a similar name. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  EMBARGO: not for release before 19:30 on Wednesday 4 October 2017  We concluded that domestic retail banking should be structurally separated from global wholesale and investment banking. The distinction was not between a safe utility bank which would never fail and a racy casino bank which would never be saved. We have had plenty of experience of retail banks getting into trouble. Both sides of the ring-fence would undertake economically valuable activity, both would take risks, but each would need to be resilient to these risks without relying on the other. I will not rehearse the full arguments here, but let me highlight one which has had less attention, which is about time-consistency. It is a plain fact that prudential regulators tend to ring-fence retail banking operations in a crisis – I have done it myself. Retail is predominantly domestic by nature and its troubles are best managed by those who know it best. So it makes more sense to recognise that reality and get the structures right ex ante, than to try and do so in a tearing hurry just as a crisis hits. Ring-fencing retail banking is geofinance in action – in a good way.

Extending the logic of domestication  Retail deposit-taking is a critical economic function and local supervisors have more levers over subsidiaries than branches. Therefore – consistent with the ICB’s logic – we have preferred for several years that international banks from outside the EEA (known as ‘third countries’) with more than £ of retail and SME FSCS-covered 6  transactional or instant access account balances put them in a subsidiary . There are not many of these: most international banks in retail focus on small expatriate or diaspora communities, or on particular niches in private banking. We expect each of these firms to have a viable and sustainable UK business model which accretes a portion of its own capital, rather than being reliant on its parent, with high standards of risk management and governance. 5  See the PRA Annual Report and Accounts; July 2017 and U.S. Department of the Treasury; A Financial System That Creates Economic Opportunities; June 2017. 6 See SS10/14: Supervising international banks: the PRA’s approach to branch supervision; September 2014. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  EMBARGO: not for release before 19:30 on Wednesday 4 October 2017  These retail subsidiaries are not as insulated as the financial and operational separation required by the ICB. But with a much lower threshold than the £ billion of core deposits at which ring-fencing kicks in, our policy follows the same logic, proportionately applied.
Debt ratios for indebted individuals in different age groups Per cent 500 400 300 200 100 0 1 (27) 2 (33) 3 (38) 4 (42) 5 (47) 6 (51) 7 (56) 8 (61) 9 (66) 10 (76) Age deciles (average age within decile) Source: The Riksbank  Many borrowers do not reduce their debts, and those that do reduce them slowly Let me now also shed some light on how debts change over time. Between 2012 and 2013, 24 per cent of the individuals with mortgages increased their debts and 16 per cent had unchanged debts. Just over 60 per cent reduced their debts in the same period (see  BIS central bankers’ speeches  7  Chart 6). For those that reduced their debts in this period, the reduction corresponds to an average remaining amortisation period of 99 years. In other words, 40 per cent of the individuals that have mortgages have increasing or unchanged debts, and those that reduce their debts do so very slowly. Over the three years for which we have data, the proportion of individuals reducing their debts has in fact increased and the proportion increasing their debts has decreased. On the other hand, the increase in the proportion of individuals reducing their debts has been very small. All in all, the analysis of the Riksbank’s credit data thus shows that debt ratios are fairly evenly-distributed across income groups. They are also spread throughout the country. The analysis also shows that debt ratios are high even for older borrowers.

As the information on the loan stock presented in the surveys is at the aggregate level, it is also not possible to analyse, for example, the distribution of debt ratios. In November 2013, the findings of a government inquiry, “Over-indebtedness in a credit society”, were published. The data in the inquiry was partly based on new information from the Swedish Enforcement Authority and from UC, a credit information agency. However, the data constituted only a cross-section of the households’ debts and thus did not enable an analysis of how debts had developed. All in all, this means that existing sources of data do not provide a complete picture of household debt, and that the discussion of the risks associated with household indebtedness has so far been based on limited material. The Riksbank’s credit data an important piece of the household-debt puzzle In order to be able to perform better analyses of household debt at the individual and household levels, the Riksbank therefore decided in the summer of 2013 to gather credit information on all of the borrowers of the eight largest banks. 6 This information covers all the  4  International studies have shown that a substantial build-up of debt can increase the probability of financial crises and of falls in housing prices, as well as exacerbating the effects if a crisis does occur. See, for example, Borio and Drehmann (2009), Schularich and Taylor (2012), and the IMF (2012).
Two important issues in this context are whether this is a sufficiently long time perspective and whether there are problems with the forecasting methods that lead to the effects of households’ increased indebtedness being underestimated. The reason why the Riksbank has chosen to focus on the inflation forecasts one to two years ahead is that this is the perspective in which monetary policy is assumed to attain a full impact. However, it is not possible to disregard expectations of how inflation and the real economy will develop beyond the two-year horizon. Sometimes shocks may occur that affect the economy for a much longer period than two years. This indicates that monetary policy should, in principle, also take into account whether events now, such as developments in household indebtedness and house prices, can be expected to have serious repercussions on the real economy and inflation in a longer perspective. However, at present there is no reason to believe that the developments in the housing market or household indebtedness entail a risk of creating shocks that would require special consideration in monetary policy. So what are the potential problems with regard to assessing how indebtedness and property prices affect inflation? Our forecasts are based on both calculations using economic models and more qualitative assessments of the factors expected to affect inflation. The theoretical models are usually based on households behaving in a rational manner.

Mervyn King: Stocktake of the UK economy Speech by Mr Mervyn King, Governor of the Bank of England, at the East Midlands Development Agency/Bank of England Dinner, Leicester, 14 October 2003. *  *  *  The Bank of England is back in Leicester. Between 1844 and 1872 there was a branch of the Bank of England in Leicester, located in Gallowtree Gate. Sadly it operated at a loss, in part because the Agent lived in style driving about town in a carriage and pair with two men in livery, and the branch was closed. Only six years ago did we re-establish our links with the City through the creation of a new Agency in the East Midlands. The purpose of that Agency - staffed by four members of the Bank who work in rather less style than their predecessors - is to listen to you and other businesses about what is happening on the ground. The reports of our Agents around the country are crucial to the Monetary Policy Committee. The information we receive from you, and our other eight thousand business contacts around the country, are key pieces in the large jigsaw puzzle of the UK economy that we assemble each month in order to see the big picture. Some of the statistical fog hanging over the British economy lifted a week or so ago with the publication of a new picture of demand and output over a number of years.
Collaborative Data Platforms Industry collaboration through technology and data sharing platforms will become an important driver of innovation in the future of Finance. MAS has been promoting such collaboration since the beginning of our FinTech journey in 2015. Let me highlight three recent initiatives. First, ChekFin, a decentralised credentials platform to support partnerships between financial institutions and FinTech firms. Financial institutions seeking collaboration with FinTech firms often have difficulty ascertaining their reliability and capacity. ChekFin will enable financial institutions to obtain verified credentials of FinTech firms, such as business references, awards they have obtained, and investor funding records. These credentials are immutably stored on a blockchain as a golden source of information. FinTech firms decide who they want to share their private credentials with. ChekFin is a partnership among the ASEAN Financial Innovation Network, BCG FinTech Control Tower, and Affinidi, with MAS as a founding partner. Ten global financial institutions have already signed up for ChekFin, and the platform will be launched next month. Second, Project Greenprint – a technology and data platform to support the green finance ecosystem.

Of course, the ancient Romans did not have a god for the Internet, but perhaps Mercury – the god of commerce and communications – comes closest. The future of Juno, Plutus, and Mercury is increasingly becoming entwined, in large part due to technology. Let’s check out what Juno, Plutus, and Mercury have been up to lately. JUNO AND INNOVATIONS IN MONEY Juno has been busy in the past decade with new forms of money emerging. But before we can make sense of new money, let us refresh our understanding of existing money. Today, we keep money in two forms: physical cash in the form of notes and coins; and digital money in the form of deposits with commercial banks. Most of our money is privately created by commercial banks and is in digital form. Bank deposits account for 92% of the money supply in Singapore and are the basis for all electronic payments by households and firms, using debit and credit cards, e-wallets, and account-toaccount bank transfers. The commercial banks in turn place reserves with the central bank to settle inter-bank transactions arising from these electronic payments. Confidence in money is anchored by the central bank. Central banks conduct monetary policy to ensure low and stable inflation, which safeguards the purchasing power of our money. In addition, by regulating commercial banks and acting as lenders of last resort during crisis periods, central banks underpin the overall soundness of the banking system.
In my view, however, the technical innovations are not the only explanation. The deregulations that began in the 1980s, as well as the consolidation of the federal budget during the 1990s, should also be mentioned as major factors. The deregulations have helped to strengthen America’s corporate sector and the improvement in the federal finances led to increased confidence among households and firms as well as somewhat lower long bond rates. Low interest rates and higher productivity growth then paved the way for the massive wave of investment. The U.S. economy’s growth rate shot up and unemployment dropped to levels that hardly anyone believed could be combined with low, stable inflation. As outcomes proved earlier forecasts wrong, assessments of how strong demand’s long-term growth could be without generating rising inflation were adjusted gradually upwards. Turning then to share prices in the United States, in the first place the Nasdaq exchange with its predominance of high-tech companies, we can see that expectations of corporate profits rose rapidly  BIS Review 20/2001  1  to levels that had not been seen since the 1930s. The trend peaked last year with share prices at record levels and a GDP growth rate above five per cent, in some quarters even higher. The reverse side of the medal lies in the imbalances that have built up during this period. The United States has been living on borrowed money; even though the federal budget was first consolidated and then generated a growing surplus, investment exceeded aggregate saving.

The less optimistic scenario — the U Some observers see a risk of the upturn occurring more slowly than the V scenario assumes. They see a path that instead resembles a capital U, with a downturn that is more protracted. Investment has been a strong factor behind the upward phase in recent years and proponents of the U scenario consider the economy has been hit by excessive investment, so that an unduly large capital stock must now be adjusted. This adjustment is accentuating the economic slowdown, making this more difficult to counter than seemed likely earlier. It will take time — perhaps a long time — for the interest rate cuts to have an effect on demand from households and firms. Moreover, the conditions for a quick recovery have been worsened by the imbalances that have accumulated in the economy. This scenario envisages that the U.S. labour market is still so overheated that if IT prices fall while commodity prices rise, at the same time as a weaker dollar adds  2  BIS Review 20/2001  to the cost of imports, then inflation will move up even though growth is weak. The Federal Reserve might have more difficulty in handling this scenario because if inflation is threatening to rise, the interest rate would be less available for turning activity upwards. There is also the possibility of the promised tax cuts taking time to materialise, which would be liable to postpone a recovery.