samchain/econo-pairs-v1 huggingface dataset:
One reason why equilibrium interest rates are low at the moment is because the distribution of economic outcomes has become more skewed to the downside. In this regard, low rates are a consequence of riskier environment, not the cause of higher risk premia. 26 For example, see Ihrig, J, Klee, E, Li, C, Wei, M, and Kachovec, J (2018), ‘Expectations about the Federal Reserve’s balance sheet and the term structure of interest rates’, International Journal of Central Banking, vol. 14(2), pp. 341-390. 21  All speeches are available online at www.bankofengland.co.uk/news/speeches  21  V. Winter – Monetary policy in a persistently low r* world Looking ahead, deep structural changes in economies are creating disinflationary pressures at a time when conventional monetary policy space is already limited. Inflation targeting frameworks will be tested in new ways. It feels like winter is coming. In all likelihood, equilibrium interest rates will remain low for a prolonged period as many of the structural forces that have pushed them down are set to persist for years. Moreover, these could likely to be reinforced by flaws inherent in the international monetary and financial system27 and the disinflationary effects of advances in technology and the changing nature of commerce.28 The principle structural force leaning in the other direction on inflation is that the shift towards deglobalisation with the potential fracturing of the global trading system.

Ben Bernanke has advocated a temporary shift from inflation to price level targeting when policy rates reach their lower bound.36 Others have suggested moving from a point target to average inflation targeting. Both options would require policymakers to “make up” any period of low inflation arising from the constraints of the lower bound with higher inflation in future, increasing monetary stimulus. However, these strategies might work less well in open, than closed economies, particularly ones like the UK where exchange rate pass-through is large and protracted. The response of the exchange rate to shocks would likely push up inflation during downturns in domestic activity, leading make-up strategies to generate perverse policy prescriptions. See Evans, C, Fisher, J, Gourio, F and Krane, S (2015), 'Risk Management for Monetary Policy Near the Zero Lower Bound’, Brookings Papers on Economic Activity, Economic Studies Program, vol. 46(1), pp. 141-219. 36 See Bernanke, B et al, ibid. 35  24  All speeches are available online at www.bankofengland.co.uk/news/speeches  24  An alternative and more radical approach than developing tools to provide stimulus at the ELB is to make it less likely that policy rates need to reach it. Absent divine reflation, the most frequently discussed option is to raise the inflation target. In theory, once achieved, and if inflation expectations moved up smoothly consistent with the new target, then this framework change would reduce the frequency of hitting the ELB. However, like many ideas in economics, this works better in theory than practice.
They rely on huge amounts of data and their experience of how to deal with them; by taking advantage of network effects, they are starting to attack strategic links in this value chain (services with high technological added value and sometimes customer relations) in order to be able to offer new profit generating activities. Thanks to their dominance of certain sectors – let us take the example of cloud computing – and to their ability to expand – their cash reserves enable them to penetrate a market, to dominate it and to use technology to set up barriers to entry – these new entrants are giving rise to a significant risk of dependency, or even captivity, for established financial players. While  BigTechs today are, at least in Europe, subcontractors of banks and insurance companies, we cannot rule out a reversal of business models which would confine financial institutions to the role of specialised service providers: credit origination, middle and back office, compliance. These prospects raise several questions in terms of European sovereignty: how can we effectively protect citizens’ data (be they payment or personal data) and offer them real control over their use? How, in a global ecosystem with ever more open architectures, can we increase the strength and resilience of the financial system in the face of cyber risks? How can we encourage the development of pan-European payment solutions in the face of rising competition from non-European players in the payment solutions segment?

In this regard, the Europe of payments should seize the  opportunity offered by the digital revolution to develop a pan European payment 3/4  BIS central bankers' speeches  solution. Our institutions are an integral component of this European ecosystem and intend to play their full part in it: the Banque de France Lab, the ACPR Fintech-Innovation unit, with its joint ACPR-AMF Fintech Forum, and all public authorities, are fully mobilised to support the expansion and growth of this ecosystem. Second, we also apply this injunction to innovate to ourselves: we can only achieve our objectives and truly support the market if we ourselves are innovative. In this respect, our projects are and must remain numerous. I have already mentioned MADRE, I would like to make a special mention of our analysis of “weak signals” by artificial intelligence, to detect fragile companies. This project is remarkable by the cooperation that it involves between a wide variety of public players: the Direction générale des entreprises (DGE), the Délégation générale à l’emploi et à la formation professionnelle (DGEFP), the Agence centrale des organismes de sécurité sociale (ACOSS) and the Direction interministérielle du numérique et du système d’information et de communication de l’État (DINSIC) and of course the Banque de France. Our search for innovation also means innovation in work methods and project implementation: intrapreneurship, which we have set up at the ACPR, is a good illustration of this.
We have moved beyond measuring access, to including measures of the usage and quality of financial inclusion services. We need to go further to include measurement on how efficiently we are increasing financial inclusion. Such measures do not exist widely, if at all, and have yet to be systematically propagated. This blind spot ignores one of the most important aspects of innovative strategies for financial inclusion, which is the potential to drive down the costs of delivering financial inclusion initiatives. A framework for evaluating financial inclusion efficiency can provide powerful incentives to harness technology in the most optimal way. This should drive lower the costs of delivering inclusive financial services over time, and thereby enhance the viability for both Governments and private actors. Sustainability also calls for the strengthening of financial institutions that provide services to low-income and vulnerable groups. The misconduct or underperformance of such institutions can have a disproportionate impact on the poor simply because they have lower buffers. It can also significantly set back financial inclusion efforts by further entrenching the mistrust of formal financial institutions. It is therefore, critical for such institutions to exemplify strong and socially responsible corporate governance, and to have the appropriate technical expertise that will enable them to expand product offerings, increase outreach and develop alternative delivery channels. They must also be adept at identifying and managing financial and operational risks inherent in their business models. This requires investments in systems and in the development of talent with deep knowledge within the institutions.

In its own way, this symposium sets out to disrupt the ordinary in order to achieve the extraordinary; invoke curiosity to inspire creativity; and challenge the conventional to embrace novelty. With open minds and thoughtful exchanges, the next two days present an excellent opportunity to generate a critical mass of ideas that form the foundation for new strategic partnerships to be built, and existing ones strengthened. The time is now to deliver on the financial inclusion promise to the 2 billion unbanked and vulnerable people who continue to live in the most challenging financial circumstances. With an “eye for innovation”, I am certain we can spot the opportunities that will deliver that promise. 4  BIS central bankers’ speeches
The IMF has a key role to play in helping members with sovereign debt issues and in making the debt resolution process more predictable and efficient. In this vein, we support the joint efforts of the IMF and the World Bank to strengthen the Common Framework for debt treatment in a coordinated and timely manner, and in total concert with all creditors. We are all committed to a greener world and attach great importance to transformational reforms required to address climate change-related challenges for the benefit of generations that follow. No country and no region is immune to climate change. It is as much an existential threat to our constituency and to the MENA region as it is to other constituencies and regions. In our region, we have experienced historical floods at the same time as historical droughts. We have to recognize, and collectively address, the existing highly inequitable burden sharing, where countries with negligible carbon footprints bear the weight of negative externalities associated with climate distress created over the years by large emitters. Our countries are  3  committed to their pledges made under the Paris Agreement with the recognition that there could be country specific strategies towards the same greener targets and objectives. Finally, we reiterate our call for a strong, quota-based, and adequately resourced IMF at the center of the global financial safety net. We call on the IMF to ensure the timely completion of the 16th General Review of Quotas by December 2023.

The installation of new equipment, which was judged necessary at the beginning of the year, is taking place only very gradually, in particular at small and medium-sized companies. Retail activity perked up considerably in May. Employment levels in industry showed little change, except for the automobile industry where cutbacks continued. They fell slightly in the building sector, whilst holding steady in the retail and market services sectors. Permanent staff levels showed no significant change, although certain companies - primarily those engaged in seasonal activities as in the food-processing industry - made increased use of temporary staff. BIS Review 66/1997
This seemed a contradiction in terms to many countries – liberalising and opening up but at the same time developing resilience in the financial centre. But we have achieved both. We have managed the tension between liberalisation and developing resilience. I think we’ve managed it rather well. If you look at what happened during the Asian Financial Crisis and subsequently, the Global Financial Crisis, we have come out as one of the safest financial systems in the world. So that was an important third phase – liberalising and opening the financial centre but also developing further resilience. Our credibility today rests on each of these three major phases in MAS’ development and policies – from the foundational years, to the period when we reoriented monetary policy and then in the last phase, liberalising and developing further resilience of the financial centre. The credibility has added up over the years. I also want to say that MAS has become an organisation of excellence. This has particularly been due, in my opinion, to the organisational development efforts that began especially in the mid-1980s, when Mr JY Pillay came in as the Managing Director, followed in subsequent years by Mr Lee Ek Tieng. There was a great focus on organisational development from the mid-80s. It happened that both Mr Pillay and Mr Lee Ek Tieng were amongst the most senior leaders in the public sector. They led the transformation of the MAS as an organisation of people.

According to the Ernst&Young’s Fintech Adoption Index, one-third of consumers utilize at least two or more fintech services and they are becoming increasingly aware of FinTech as a part of their daily lives. The FinTech Adoption Index for services offered by FinTech organizations under five broad categories – money transfers and payment services, financial planning tools, savings and investments, borrowing and insurance, indicates that money transfers and payment services are continuing to lead the FinTech change, with adoption standing at 50% in 2017 and 88% of consumers anticipating of doing so in the future. Thus, the global payments industry is currently undergoing a paradigm shift driven by rapid advances, the influx of new technologies and evolving consumer behavior as digital generations come of age. The emerging FinTech enhances the transformative power of digital payments via innovation. The irruption of digital payments relates to its many opportunities. Embracing payments digitalization has the potential to substantially reduce the costs, increase the efficiency and enable broader access to payment services. With the rise of new payment digital technologies developed by the FinTech, and increasingly adopted by banks, consumers and merchants nowadays have a wide range of payment products to choose from. Innovation developments, such as instant payments, payment initiation services, person-to-person mobile payments and contactless proximity payments have the digitization process accompanied by innovative solutions in their essence. The payment innovations and digitization process also have an impact on the transformation of payment market infrastructures.
SNB Bills allow us to be more flexible in steering liquidity. Consequently, we are now in a position to offer more long-term transactions, which help calm the money markets and facilitate the steering of the threemonth Libor. The financial market crisis has also shown us that the liquidity-shortage financing facility can only contribute to calming the situation in the money markets if it is actually used when needed. However, even during the crisis, it was rarely called upon. The reason for this being that the direct costs of drawing on it were relatively high, as were the indirect costs ensuing from the stigma associated with using the facility. The SNB has thus decided to lower the direct and indirect costs of using the facility. To start with, we will reduce the special-rate interest premium from 200 basis points to 50 basis points. This will become effective from 1 January 2009. The SNB will also make some changes to its reporting methods. In order to protect the borrower’s reputation, claims from the liquidity-shortage financing facility will, in future, no longer be reported separately. These two measures should encourage banks to utilise the facility’s limits more frequently and therefore increase their liquidity provisioning. We have also found that, in periods of turbulence, some of the data reported in our weekly publication Important monetary policy data are misinterpreted, which can have a destabilising effect. To remedy this, we have decided to discontinue the real-time announcement of individual transactions and facilities.

1  Chart 1 shows the “fever curve” of the money market, i.e. the difference between the three-month Libor and the three-month (T)OIS rate (tom-next/overnight indexed swap). This difference reflects the credit and liquidity risk premium on unsecured money market trades. It is a barometer of the health of the money market and, in the broader sense, also for that of the financial markets in general. 2  The five crises in the comparison are the stock market crash of 1929, the oil crisis of 1973, Black Monday in 1987, the bursting of the IT bubble in 2000, and the current crisis. In each case, we look at price performance in and around the index’s highest recorded level prior to the crisis, which does not necessarily coincide with the onset of the turmoil. The highest levels were reached on 3 September 1929 (Black Tuesday was on 29 October 1929), on 11 January 1973 (oil crisis), on 25 August 1987 (Black Monday was on 19 October 1987), on 14 January 2000 (IT bubble), and on 9 October 2007. 3  For annual data and the Case-Shiller Composite 20 Index, cf. Robert J. Shiller, Irrational Exuberance (2006, 2nd edition). BIS Review 157/2008  1  These financial losses alone will continue to have a major impact on the real economy for some time to come, owing to the fact that their full effect is not generally felt immediately. Despite the historic disruptions in the financial markets, this is not the 1930s.
The role of supervisors – in-house initiatives As well as these initiatives, which may be considered external, we are also working in the Banco de España to adapt to this new reality. Firstly, we have created an internal function entrusted with assessing the impact we as an institution have on the environment. The aim is to articulate and coordinate the necessary measures to reduce that impact. Secondly, as a macroprudential supervisor, we clearly need to be able to assess and quantify the risks that the transition towards a more sustainable economy poses, both for individual banks and the financial sector as a whole. Among other functions, we need to be able to assess the level of financial institutions’ exposure to high-carbon emission activities, perform stress tests for the financial system overall and define scenarios and methodologies to be applied by banks individually. In consequence, we are designing internal governance structures and methodologies, actively participating in the cultural shift in the SSM supervisory model. Naturally, we are also evaluating the information and data requirements needed to address this challenge. Nor should we forget that central banks are also important investors in the debt markets, both in the area of monetary policy and reserve management. Although we have not yet included environmental risk assessment in our credit analysis, we are working to remedy this. 5  ESG - Environmental, Social and Governance.

I trust this regulation will be approved shortly, in accordance with the objectives set by the new European Commission, and that this taxonomy will finally provide us with a common definition of what may be considered “environmental” or “sustainable”. The role of supervisors – external initiatives As supervisors, we clearly have responsibility for urging on these changes. We need to be proactive; in particular, we need to enter into a dialogue with banks to analyse how they are incorporating environmental risk. At the Banco de España we are intent on pressing ahead with this dialogue. Let me mention just a few examples of recent steps taken. To assess the level of preparation for environmental risk, we conducted a survey among the 12 banks directly supervised by the SSM and several other smaller banks. Subsequently we discussed the survey findings with the participating banks, conveying to them the importance of this issue and the supervisory expectations. According to the survey findings, many banks that were already explicitly considering environmental risk have included it in their social responsibility areas. Almost all have a team dedicated exclusively to Sustainable Finance and some also indicate that they have established specific committees, reporting in some cases to the Area General Manager or Corporate Secretary and in others directly to the Board of Directors. 4  In general, the Green Bond Principles are updated once a year, to reflect the latest market developments.
Our forward guidance is clear as to the sequencing: “we expect [the key ECB interest rates] to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases.” There is no doubt within the Governing Council about this sequencing. In all events, we should not consider raising interest rates until we have reached a sustained adjustment in the path of inflation. Page 6 sur 8 4/ The fourth instrument is the provision of liquidity to financial institutions. In October 2008, we introduced the fixed-rate full allotment policy in all our regular refinancing operations. The maturity of this liquidity provision was then extended with the launch of 3-year longer-term refinancing operations (LTROs) and, later, targeted longer-term refinancing operations (TLTROs). In September 2017, a total of EUR 760 billion is still lent to euro area banks through TLTROs, which at over 7% of euro area GDP is substantial. III. Supplementing monetary policy in Europe For the future, we can be confident, because our monetary policy is effective and recovery is robust. But our confidence must be without complacency, because monetary policy cannot be the only game in town: it must be supplemented by national reforms, and by a strengthening of the euro area. We have been saying this for a long time, but now is the time to act.

It is now urgent to make concrete progress on substance, and to move up a gear, by triggering four accelerators of the Economic Union: - A macro accelerator: the French President, Mr. Macron, in his speech about Europe ten days ago at the Sorbonne, started by talking about the “coordination of economic policies”. In this widely-discussed speech, I believe that this was not sufficiently remarked upon. In my opinion – as an independent central banker – we should aim to achieve a genuine collective economic strategy; a mutual commitment between the Member States of the euro area, for more reforms in countries where they are required, and more fiscal support in countries with leeway for this. This collective strategy could be prepared and adopted as of 2018. It could be supplemented by the creation of a common stabilisation fund, aimed at supporting, through lending, Member States facing asymmetric shocks. This could be part of a European Monetary Fund, provided that its scope of action is extended beyond the current European Stability Mechanism. - A micro accelerator: i.e. a Financing Union for Investment and Innovation. The aim is to mobilise the EUR 350 billion savings surplus of the euro area, notably to shore up equity which is the key to an innovation economy, and also to foster synergies, thanks to an integrated steering mechanism, between the Juncker investment Plan, the Capital Markets Union and Banking Union. Here too, progress could be rapid.