samchain/econo-pairs-v1 huggingface dataset:
We understand that banks want to share this risk with borrowers, and we can see that banks are actively increasing the share of loans at floating rates to enterprises and corporations in their loan portfolio. It now stands at 38% of the loan portfolio. Increased investments in floating rate bonds, which is 32% of the banking sector’s bond portfolio. This is a rather normal practice in corporate lending, where borrowers have the necessary competencies to make a decision. Such borrowers find loans at floating rates all the more interesting because the rate is usually lower when the loan is issued. But in terms of retail lending, the situation is different: borrowers may be seduced by a lower rate and cannot always reasonably assess the risks that an increase in rates may entail. There is a possible subsequent increase in payments and increased debt burden, which is doubly dangerous during periods of instability, when a person may lose their income. In effect, this could become a second foreign exchange mortgage: when people have lost the ability to service their debt, and eventually the borrowers’ risks become the banks’ risks. For you, interest rate risk will simply turn into credit risk. Therefore, we are now discussing with legislators, the Ministry of Finance, and the banking community what the parameters for regulating floating rates should be. We hope to find an option where everyone can use this tool with some degree of safety. The next two topics are related to systemically important banks.

Changes in the population pyramid, increased immigration, the growth of the demand for second homes by residents and nonresidents and, above all, the continuous growth of income and the pronounced fall in interest rates are factors that help explain the trend growth of the relative price of housing in Spain. In addition, the unfavourable course of stock market prices in the last three years has enhanced the attractiveness of alternative investment opportunities, such as those offered by real estate. Yet in a market such as that for property which, by its very nature, sees supply adjust relatively slowly, demand pressures such as those arising from the aforementioned factors may cause excessive price reactions that tend to be corrected subsequently. This appears to be the situation currently in our country where, even with a significant rise in the rate at which houses are built, property values may have exceeded the levels consistent with the trajectory of their determinants. In such a situation, it is likely -and desirable- that house-price growth rates will be brought back progressively and in an orderly fashion to levels more in line with their fundamentals. This process, which should run parallel to gradual moderation in the resort to credit financing by the households and companies most directly involved in the real estate business, would prevent house prices from moving too far away from their equilibrium value.
There is another lesson that I draw from this history, namely that there must be some difficult impediments to achieving the goal of institutional stability in financial regulation. To start with, achieving consistency and clarity in identifying the objective of regulation has been a problem in the past. The new approach anchors the PRA’s primary objectives of the safety and soundness of firms and the protection of insurance policyholders in the broader goal of the stability of the financial system. This very clearly ties together micro and macro-prudential regulation, whose objectives are consistent. And, we now have a secondary objective around the competition implications of our actions, which I welcome. Just under two weeks ago we announced changes to the Bank of England’s strategy and structure. In doing so, we adopted a single mission, namely to promote the public good through achieving and maintaining financial and monetary stability. This single mission is much more than just the speak of management, it is a clear change intended to promote the integration of the Bank of England’s objectives of monetary and financial stability. This integration of objectives into a single mission represents a very deliberate decision that the Bank of England should not be organised as a series of silos defined by our different statutory objectives and by the structure of policy making committees given to us in legislation.

I am confident that we, as Europeans, and more specifically in our central banking function at the ECB, will be able to master the “challenges ahead” and, in this way, to contribute to the completion of the European project through the successful integration of the future Member States into the euro area. Thank you for your attention. BIS Review 92/2001  5
Rates are considerably lower in Sweden (4.25), Denmark (3.50) and Finland (3.25). Wage developments over the last few years can contribute to explaining the differences. In Norway wage growth has been high over the last five years, reflecting a tight labour market. Looking at data for wage growth from the OECD, the ranking of interest rate levels in the Nordic region corresponds to the ranking of average wage growth since 1998. The Norwegian krone has appreciated by around 15 per cent since mid-2000. Seen over a longer period, the krone has been rather stable. The present level is only around 6 per cent stronger than in 1990. Over this longer period, other Nordic currencies have shown larger fluctuations. Over the last two years, the appreciation of the Norwegian krone has been driven by the wide and increased interest rate differential between Norway and other countries. The interest rate differential reflects high growth in wages and aggregate demand in Norway. There is thus a clear link between cost pressures in the Norwegian economy and the exchange rate. The link works through interest rate expectations driving the krone upwards. The appreciation of the krone has a dampening effect on inflation. At the same time, profitability in the internationally exposed sector is under pressure both due to higher wage costs and the appreciation of the krone. But the krone can move in both directions. It will not appreciate indefinitely. If the krone follows the path of the forward rate, it will depreciate in the years ahead.

GDP for Mainland-Norway has on average increased by 2.8 per cent annually since 1990. This compares to 1.7 per cent in Sweden, 2.1 per cent in Denmark, 1.9 per cent in Finland and 2.5 per cent in Iceland over the same period. The differences for average GDP growth since 1995 are somewhat smaller. Although GDP growth in Norway was moderate in 2001, capacity utilisation in the Norwegian economy remains high. So far, the impact of the international slowdown on the Norwegian economy has been limited, partly due to high oil prices. Unemployment has been low since the mid-1990’s. Private consumption is expected to remain buoyant due to high wage growth and an expansionary fiscal policy in the years ahead. Prices for domestically produced goods and services are rising fast. Inflation in Norway is being dampened by a close to zero rise in prices for imported consumer goods. The different cyclical developments in Norway are also reflected in the stock market. Norwegian stock prices have become much less correlated with world markets over the last years. The correlation is considerably lower than in the other Nordic countries. The correlation for Denmark is also rather low, but this is partly due to low exchange rate correlation. When looking at the correlations using national currencies, the Danish correlation is higher and more in line with that for Sweden and Finland. BIS Review 47/2002  1  Iceland and Norway have the highest key interest rates among the Nordic countries, at 7.9 and 7.0 per cent respectively.
10  BIS central bankers’ speeches  15  Chart 9: Unemployment on a solid downward trend, and short-term unemployment now below pre-crisis average 5 6 months or less between 6 and 12 months over 12 months  4.5 4  3 2.5 2  Per cent  3.5  1.5 1 0.5 2015  2014  2013  2012  2011  2010  2009  2008  2007  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1996  1996  1995  1994  1993  1992  0  Notes: Dotted lines show averages computed over 2000–5. Source: ONS and Bank calculations. In the wake of the crisis, one reason that headline unemployment has not been a sufficient summary statistic for slack in the labour market is because of underemployment of those in work. Employees wanted to work more – perhaps to make up for lost income. This gap between actual and desired hours widened significantly (Chart 10). Since the start of 2013, it has been closing and most recently, rather sharply so. As overall employment growth remains strong (Chart 11), this may reflect a normalisation of working patterns, with desired average hours returning to their pre-crisis level, rather than an unwelcome decline in labour demand. An additional source of labour supply is net migration, which has recently been running above past averages.

Column (2) adds lagged inflation as a crude measure of inflation expectations, and column (3) further adds the recruitment difficulties measure. Both enter with the expected sign and indicate that a 1 percentage point rise in inflation or a 1-point rise in the agents’ score would tend to correlate with rises in wage growth of between ½ and ¾ percentage point. The coefficient on unemployment remains at around unity. Columns (4) and (5) add measures of inflation expectations. Relative to (3), the inflation expectations measure in model (4) adds little explanatory power and enters with the “wrong” sign, possibly indicating multicollinearity. Dropping inflation, in column (5), restores a role for inflation expectations with the expected sign. Model (5) has overall marginally less explanatory power than model (3). Columns (6) and (7) add productivity growth to the model. In moving from model (4) to (6), there is a small increment in explanatory power, and productivity growth enters significantly, although the coefficient on recruitment difficulties falls and is now estimated less precisely. Inflation expectations continue to enter with the “wrong” sign and their coefficient is estimated  25  In Gali’s model, unemployment is positive under flexible prices and wages on account of a steady state wage mark-up, which captures inefficiencies in wage setting. Unemployment can move away from this rate in the short run, during which period nominal wages and prices are rigid, in response to shocks to the economy. 18  BIS central bankers’ speeches  imprecisely.
In all, our view is that the improved economic fundamentals and the more flexible policy regime should place the economy in a better position to weather the current turmoil without too much impact on growth and economic stability. And with growth continuing, the performance of the banking sector will also benefit. My last point is that the ability of the Thai banking sector to weather the turmoil is also confirmed by our recent stress-testing exercise which covers credit risk, market risk, and liquidity risk, linked to a macroeconomic impact scenario. The result indicates that the Thai banking system is quite resilient. Thai banks can withstand sharp economic slowdown and unfavorable market volatility quite well. This is a result of strong profitability and capital accumulation, as well as prudent credit and investment policies over the years. And for our part, given the increased uncertainty in the external environment, the Bank of Thailand will continue to monitor our banking sector and financial markets closely, and to move forward in our regulatory reform to enhance the risk management and the efficiency of the banking system. In the near-term, what we have in the pipeline is a full implementation of Basel II by 2010, which includes the introduction of Pillar I by the end of this year, implementation of Pillar III by the middle of next year, and the introduction of Pillar II by 2010.

A regulatory framework that remains to be finalised With regard to banking regulation, the Commission presented its proposal at the end of October 2021 for the transposition into EU law of the international agreement of December 2017, which is a decisive step towards the finalisation of Basel III. The ACPR supports this proposal which takes full account of Europe’s specificities and allows sufficient time – until 2032 – to adapt to the new features of supervision. But I want to be very clear on this: the exemptions regarding housing loans or unrated businesses must absolutely remain temporary. Any temptation to make them more permanent would call into question our commitment, the international credibility of France and Europe. In response to certain surprising but recurrent claims from the banking industry, let  Page 5 of 8 me just re-state the obvious: in the past ten years, the regulatory framework has done nothing to hinder the sound, and even very broad, financing of the French economy; on the contrary, it has strengthened the resilience of the financial system, as became abundantly clear during the Covid crisis. We must not deviate or drag our feet: France and Europe have everything to gain from a stable and balanced Basel III; we shall strive to maintain this level international regulatory playing field, including in investment banking which is important for European sovereignty.
In retrospect, we see that market participants failed in their risk assessment through the ten years following the introduction of the euro. Economic policy also failed. EU rules relating to budget deficits and public debt were disregarded early on when Germany and France exceeded the limits they had so eagerly advocated when the European Monetary Union was established. Other countries followed their example. Low interest rates made it easy to finance deficits by issuing new debt. BIS central bankers’ speeches  1  When financial markets collapsed in autumn 2008, the authorities had to intervene. Bail-out packages for banks shifted debt from private to public hands. Governments increased spending to curb the fall in activity. But Keynesian policy – increased spending to stimulate demand during a downturn – requires a willingness to exercise fiscal restraint during an upturn. Many countries had large budget deficits and high debt already before the crisis despite many years of prosperity. Limited growth capacity in the private sector also came into evidence when some countries could no longer stay afloat on borrowed funds. Good times turned into bad with the need for crisis-related measures. The burden became heavy to bear. Many countries are now attempting to rein in large deficits and rising government debt. Structural reforms are being implemented in Europe. Pension rules are being tightened and tax systems are under review. The cost of such reforms would have been lower in good times.

The Riksbank has chosen not to specify any exact figure for potential growth, but instead has decided to state a range of between 2 and 2.5 per cent. We have not considered it possible to be more precise than this, given the difficulties in measuring growth, etc. If we look ahead, it is reasonable to believe that growth will in future be somewhere within this interval, although where depends on how far ahead one looks. Over the coming years, growth will probably be closer to 2.5 per cent than to 2 per cent. In the longer perspective, when the demographic effects on the labour supply are greater, it is reasonable to believe in a figure closer to 2 per cent than 2.5 per cent. How much closer depends to a great extent on how much the labour supply can be stimulated during the period. Thank you! Figure 1.GDP and an example of potential GDP 1950-2003, SEK million 2300000  2300000  GDP  2100000  2100000  Potential GDP (example)  1900000  1900000  700000  500000  500000 2000  700000 1995  900000  1990  900000  1985  1100000  1980  1100000  1975  1300000  1970  1300000  1965  1500000  1960  1500000  1955  1700000  1950  1700000  Sources: Statistics Sweden and the Riksbank  8  BIS Review 64/2004  Figure 2.
An appropriate balance must be found between a sound production process with adequate controls and safeguards on the one hand, and cost-efficiency for contributing banks on the other hand. Also it is important that regulation is uniformly applied and enforced within the EU to avoid risks of further fragmentation in the money markets, and that international coordination is sought. In the longer term, a broader overhaul can be conceived, involving changes in the calculation methodology and possibly other changes to reflect the structural changes that have taken place in terms of the functioning of the money market since the onset of the crisis, such as the shift towards secured transactions. However, this process should be primarily driven by the market, based on the needs of end-users, while being supported by the public sector. In light of the fundamental importance of money market reference rates, we are closely following the developments taking place as regards the shrinking number of panel members for establishing EURIBOR and EONIA rates. Given the authorities’ commitment to addressing the shortcomings revealed in the rate-setting process, it is in the interest of markets that banks remain in the panel while the regulatory framework is being amended and behave as responsible market participants, thus preventing potential disruption in the functioning of an important financial market segment. Related to the shift of money market transactions to the secured segment is the use of central counterparties (CCPs). 8 In 2012, CCP repo transactions accounted for 55% of all repo transactions (up from 50% in 2010).

Norman T L Chan: New round of countercyclical prudential measures for property mortgage lending Address by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, to the media, Hong Kong, 14 September 2012. *  *  *  1. I am going to announce a new round of countercyclical prudential measures for property mortgage lending. 2. Since the introduction of the fourth round of tightening measures for property mortgage loans by the Hong Kong Monetary Authority (HKMA) in June 2011, the local property market quieted down somewhat – but for just about seven months. The property market began to heat up again in February 2012, with significant increase both in transaction volume and prices. Cumulative growth in property prices was as much as 13% compared with the beginning of this year. 3. The evolution of the property market cycle in Hong Kong is affected by many factors, including the external environment. With the third round of quantitative easing announced by the US Federal Reserve last night, there can be more capital inflows through the US banking system into the emerging markets. Moreover, Europe has earned some respite from its debt crisis following the announcement by the European Central Bank of its bond-buying programme and related judgment by Germany’s Constitutional Court. So the sentiment in financial markets is likely to stay calmer for a while. Against this background, the risk brought by the continued heating up of the Hong Kong property market on the banking sector will rise again.
This approach is underpinned by the 2013 G20 declaration which emphasizes the importance of regulators deferring to one another when justified by the quality of the regulatory and enforcement regimes.9 It is also exemplified in our ongoing cooperation with the US CFTC, which we enshrined in a revamped MOU last year. In the UK, we are in the process of designing our approach to our new onshored legal framework for incoming CCPs – known as UK EMIR 2.2. As we do this, we’ll be looking to ensure proportionate and informed reliance is at the heart of our approach. 3. Ahead of the curve  My second recommendation for how to sustain the simpler system: keep it under review. Since 2008, the financial system has evolved. Reforms have been implemented; innovation, preferences, and changes in our economies have reshaped financial markets. In particular the role of non-banks has grown. We need to be on the lookout for new fault lines. The market stress we saw in March and April offers the potential to glimpse of where these fault lines might be – a real life stress test. One of those fault lines may have come into view in March. Sharp moves in asset prices catalysed the  sudden and sharp redistribution of liquidity around the system. Market participants were racing to get their hands on cash – and in particular US dollars. This led to a period of severe market dysfunction, spreading even to advanced economy government bond markets.

Lessons from the pandemic: Has the simpler post-2008 financial system held up? And where do we go from here? Speech given by Christina Segal-Knowles Executive Director Financial Market Infrastructure Directorate  Official Monetary and Financial Institutions Forum 29 January 2021  I am grateful to Stephanie Haffner, Paul Brione, Pavel Chichkanov, Sarah Crowley, Harpal Hungin, and Barry King for their help in preparing these remarks. I am also grateful to David Bailey, Paul Bedford, Lee Foulger, Andrew Hauser, Matt Roberts-Sklar, Nick Jackson and Gerardo Ferrara for their helpful comments 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  The topic of my talk today is lessons we can draw from the market turbulence we saw in March and April 2020. But before we get there I want to talk about an earlier crisis. Let’s rewind to 2008. On September 15th, Lehman brothers collapsed taking with it one side of $ trillion in derivatives contracts. Most of these derivatives were bilateral contracts – a spaghetti bowl of interconnectedness. As Lehman collapsed and others teetered near the edge, no one knew who was holding the bag. The result was panic, which, as explained by Ben Bernanke, may have been a key driver of the severity of the Great Recession. Its early stages would have been significantly less severe without the confidence collapse on Wall Street.1  1. Simpler Now let’s fast forward to 2020. Pandemic. Economic crisis. Market turbulence. But no panic in the banking system. There were a number of reasons.
Average Inventory  Crude Oil Price (rhs)  Figure 5 Crude grade qualities  Source: JPMorgan Commodities Research, Energy Intelligence Group  BIS Review 69/2004  7  Figure 6 Crude oil futures contract volumes (NYMEX)  60  300'000  50  250'000  40  200'000  30  150'000  20  100'000  10  50'000  0  0  1995  1996  1997  1998  1999  2000  2001  Non-Commercial Long Contracts WTI Crude Oil (USD/ bbl) (lhs)  2002  2003  2004  Non-Commercial Short Contracts  Figure 7 Historical WTI futures price curves 50 45  U S D /b b  40 35 30 25 20 15 0  1  2  3  4  5  6  Y e a rs to e x p iry 2 0 0 4 -1 1 -1 2  8  1 ye a r a g o  3 ye a rs a g o  BIS Review 69/2004  Figure 8 Backwardation O il Spread (Spot - Futures 3M ) in U S D 3.00  2.00  1.00  0.00  -1.00 Spread Poly.

(S pread )  31.07.2004  31.05.2004  31.03.2004  31.01.2004  30.11.2003  30.09.2003  31.07.2003  31.05.2003  31.03.2003  31.01.2003  30.11.2002  30.09.2002  31.07.2002  31.05.2002  31.03.2002  31.01.2002  30.11.2001  30.09.2001  -3.00  31.07.2001  -2.00  Figure 9 Cross-correlations between oil price and Swiss CPI  BIS Review 69/2004  9