samchain/econo-pairs-v1 huggingface dataset:
Prior to the health crisis, the risks of financial instability associated with the large-scale use, as a means of payment, of crypto-assets with unstable value, uncertain convertibility into central bank money, and without a responsible issuer and credible lender of last resort in the event of a destabilising shock, had been clearly identified. With the crisis and the acceleration of the digital transformation, IT risk, and in particular cyber risk, has taken on a new dimension and added an operational dimension of systemic importance to the risk of financial instability, which also concerns cryptoassets. c- Levers for action For a central bank such as the Banque de France, which is responsible for ensuring the smooth functioning of our payment system, the objective is thus to make sure that innovations deliver the expected benefits for users in terms of speed, cost savings and ease of use, but without undermining the efficiency and stability of our overall payment system. As a result, at the Banque de France, we are not ruling out that we might need to issue a digital form of our currency, to preserve the anchoring role of central bank money by providing it in a form that is better suited to the new, highly digitalised payments landscape.

We – the central banks of the region – should represent an example in this direction. As pioneer institutions of progress, the central banks of the region should cooperate with each other in order to expand the road for a further political, social and economic integration. I believe that the chances for a rapid and secure process of European integration could be accelerated if we will have – among others – a healthy and safe financial and banking system, which should be able to advance the economic development of the country. Nevertheless, in order to materialise the objective for the approximation of their model with that of the EU member states, we hold the opinion that the central banks of the transition countries have more difficult “homeworks” than the classical responsibilities carried out by a central bank. Speaking in more concrete terms, this has to do mainly with the challenges related to the development of markets, with the unification of different norms and standards and with enhancing credibility in the country, thus aiming at the creation of an atmosphere that inspires confidence to foreign investors. Even though they have passed into the consolidation stage, our banking systems still remain fragile, and as such, they require greater commitment and care. Regardless statistical developments, the scale of financial intermediation is relatively low, whereas time after time the shadow of shocks on the economic equilibra shows up itself in different countries.
Placed in this context, it is sobering to note that for Malaysia, insurance merely accounts for 1.7% of GDP and only 5.8% of financial assets. Clearly, there is significant, untapped potential for the industry to increase its broader economic impact, and feature much more prominently in Malaysia’s growth story. However, this cannot happen unless the industry steps up its game and takes a more strategic view of its role in the economy – working much more proactively across 1/4  BIS central bankers' speeches  the industry and with relevant bodies and agencies. Take insurance penetration. It has been sluggish. Over the past few years, penetration (in terms of total premiums to GDP) for the industry remained low at 4.8%. Less than 40% of Malaysian citizens own a life insurance or family takaful policy. For the working population aged between 20 and 59 years old, this is higher at about 50%. There are at least another around 8 million workingage individuals and over 700,000 micro enterprises in Malaysia that need protection. Of these around 3.7 million are from the Bottom 40 income group. Another pressing issue is the role of the industry in supporting a sustainable and comprehensive healthcare system in Malaysia. Health expenditure is around 4.6% of GDP. In fact, the Malaysian medical and health insurance market has the highest average gross medical inflation. It was around 15.4% in 2018. It is expected to continue rising.

But, more importantly, there is a political pressure towards it, driven by populist impatience that would like to have a lot, right away. For a number of years this impatience has been hindering long-term efforts in the form of fiscal consolidation and structural reforms, and these have unfortunately slowed in G20 countries. When we compare the performances of our different European Member States, it is clear that debt and public spending are not the engines of growth. There is a need today for fiscal stimulus in those countries that have surpluses, and for structural reforms across the board: without this there can be no sustainable growth. On this issue, I would just like to say a word on France, which has stood out as a positive exception over the past two years: the gilets jaunes (yellow vest) crisis provided justification for an emergency “package” to bolster purchasing power; but I do not think it should or even could halt the transformation efforts already underway. Lastly, and this is our third challenge, isolationism, characterised by the escalation of trade tensions, constitutes the biggest short-term threat to global growth. Even before the tariff hikes, the uncertainty caused by protectionist stances, essentially on the part of the United States, already appears to be threatening growth via its impact on business investment. More broadly, uncooperative economic strategies – including within Europe – are on the rise.
It is possible that the financial crisis will lead to an increase of long-term unemployment. At the same time, it is possible that the measures adopted in recent years will lead to a reduction of long-term unemployment. The net outcome of these two opposing forces will eventually become clear. 18 At the same time as the unemployment gap is positive (see Figure 15), there is a shortage of labour in many sectors and in the business sector as a whole (see Figure 16). This indicates that matching on the labour market has deteriorated. This is also supported by the fact that the Beveridge curve, which shows the connection between the number of persons unemployed and the number of unfilled vacancies, has shifted outwards (see Figure 17). The composition of the category unemployed has also changed. For example, the proportion of unemployed people with brief and incomplete educations has increased. All in all, for my part, I interpret this to mean that resource utilisation with regard to labour is also largely normal. The most recent Monetary Policy Update included the assessment that resource utilisation was somewhat lower than normal, but that it would be largely normal towards the end of the forecast period. My overall assessment at the monetary policy meeting was instead that resource utilisation was already normal, and I have taken the opportunity to explain my judgement in a little more depth in this speech. The different measures of resource utilisation that I have addressed today are summarised in Table 1.

BIS central bankers’ speeches  7  assessments of the level of resource utilisation can lead to different views of how monetary policy ought to be conducted. It is therefore essential that more analyses are conducted to better understand what it is that determines the development of output and potential GDP in conjunction with financial crises and deep recessions. One important factor behind the development of potential GDP seems to be total factor productivity (TFP). This is particularly troublesome as TFP itself is often counted as an unexplained residual. One possible way forward could be to combine the production function approach with economic short-term statistics to analyse how TFP behaves in normal cyclical fluctuations and in deep recessions. The almost unique opportunities for Sweden to conduct analyses based on micro data for individuals and companies should be a major asset in this regard. 8  BIS central bankers’ speeches  Figures and tables 1. Actual and trend GDP Logarithmed levels 6.5  6.5 GDP  6.0  6.0  Trend  5.5  5.5  5.0  5.0  4.5  4.5 50  55  60  65  70  75  80  85  90  95  00  05  10  Note. HP trend derived solely from annual data 1950–2010. Sources: Statistics Sweden and the Riksbank  2.
12.10.2022  Economic prospects and impact on the financial system Global Managers Meeting/KPMG Paris Margarita Delgado Deputy Governor  [I am very pleased to join you at this global meeting to share my views on these challenging times and on how the current situation might affect the financial system in the near future. First of all, it must be acknowledged that our capacity to accept, digest and adapt to the shocks we have recently seen has been remarkable. At the same time, such profound and sudden changes mean that any forecast we publish becomes outdated very soon. You might agree with me that, nowadays, the only thing that is certain is that we live in uncertain times, and we must deal with this. Let me start by briefly reviewing the economic situation and the outlook for the euro area. It is worth remembering that the current inflationary pressures first emerged in mid-2021, right after the reopening of the economy following the global vaccination efforts, and have continued through to 2022. Three factors have contributed to this. First, commodity prices started to increase, in part driven by the significant recovery in demand. Second, supply bottlenecks began to emerge, mainly in maritime trade, but also in other sectors such as semiconductors, due to the post-pandemic rebalancing of consumer preferences that led to a demand push at a global level, as well as the emergence of supply-side constraints due, for example, to COVID-related containment policies in key hubs, such as Chinese ports.

These new figures represent a substantial upward revision compared with the June projection exercise – of 1.3 percentage points (pp), 2 pp and 0.2 pp, respectively-. Furthermore, economic activity in the euro area is expected to slow down notably in the coming quarters. This moderation will reflect the loss of purchasing power resulting from higher-than-expected inflation, the deterioration of consumer and business confidence and high uncertainty, the energy crisis and geopolitical risks, weakening global demand, and tighter financial conditions as a result of monetary policy normalisation, as well as the dissipation of the impact of the reopening following the lifting of Covid restrictions. Indeed, qualitative indicators -such as the Purchasing Managers’ Index (PMI) or the business and consumer surveys conducted by the European Commission- show a marked moderation of activity across the main economies in both manufacturing and services in the third quarter. Meanwhile, although supply bottlenecks are easing, activity in some manufacturing sectors is still limited. These various factors behind the increase in inflation have affected European citizens in different ways. First, the rising price of energy commodities has had a direct impact on the more vulnerable households through the increase in energy bills (electricity, gas and petrol). Second, this has had an indirect effect through the rise in prices of the products whose production costs are most affected by the price of energy, such as food. In this context, European governments have adopted fiscal and other types of measures to offset the impact of inflation.
The LCR is specifically designed to improve the short-term resilience of banks against liquidity shocks. By contrast, the NSFR measures the amount of longer-term stable sources of funding employed by an institution, the numerator of NSFR, relative to the liquidity profiles of the assets funded and the potential for contingent calls on funding liquidity arising from off-balance sheet commitments and obligations, the denominator of NSFR. Thus, the NSFR requires banks to fund illiquid assets with a minimum amount of stable liabilities over a horizon of one year. Although the objectives of the LCR and NFSR are mainly microprudential in nature, some of their characteristics also have macroprudential foundations, and therefore should have systemic benefits. Still, they may have unintended consequences. In particular, I would like to reflect on how they may interact with central bank operations. 5  See, for example, V. Acharya and S. Viswanathan, “Leverage, moral hazard, and liquidity”, Journal of Finance 66, 2011; F. Allen and D. Gale. “Financial contagion”, Journal of Political Economy 108, 2000; M. Brunnermeier and L. H. Pedersen, “Market liquidity and funding liquidity”, Review of Financial Studies 22, 2009; and R. Cifuentes, G. Ferrucci and H. S. Shin (2005), “Liquidity risk and contagion”, Journal of the European Economic Association 3, 2005. 6  See, for example, E. Perotti and J. Suarez, “A Pigovian approach to liquidity regulation”, International Journal of Central Banking 7, 2011.

Those who have operated for decades with a regime of low inflation, interest rates set by a strong independent central bank, and a strong and appreciating currency, may rightly think they have little to fear from the disciplines implied by EMU. Others will find EMU more bracing, particularly those whose inflation record has been poor, whose currency has undergone successive devaluations, and whose fiscal position is less than robust. For those countries, the EMU mission is potentially dangerous. Joining EMU would for them be to embark on a stiff mountain ascent, in weather which might be colder and less forgiving than one is used to. In those circumstances, the Boy Scout ensures that he is well prepared. He equips himself with waterproofs in the event of rain, with thick pullovers for the cold, with stout boots and, probably, a Swiss army knife in case it should prove necessary, at some point on the journey, to extract a stone from a horse’s hoof. He would also, I think, wish to ensure that he was fit, and had undertaken some strenuous rambles BIS Review 1/1997  -2-  in the foothills before making an assault on the mountain range. At this point you may be tired of hearing about Boy Scouts, and be ready to accuse me of the typical British trick of hiding behind down-home metaphors, and reducing topics of high seriousness to wry jokes. So let me be entirely clear about what I mean. We fully appreciate the great potential advantages of EMU for Europe’s economies.
Only when board directors understand that they are accountable not only to shareholders but also to customers and society more broadly through the regulatory agency can we be confident that effective governance and internal controls will be put in place. In short, banks need to own the common goal and to promote the appropriate culture, values and practices across the firm, which are to put the safety of the bank and the interest of depositors and customers ahead of the banks’ own commercial interests, just as the old fashioned bankers did in the past. Only when this happens will bank managers and employees change their mindset from “what can we get away with” to “what is the right thing to do”. Only when this happens can the banking industry regain the trust and respect that bankers used to enjoy in the not so distant past. 22. I am a pragmatist and not blind to the challenges that lie ahead in achieving what I have just described. However, I am also an optimist. Looking to the owners of banks, whilst shareholding may be diverse, there are “clusters” of shareholders, such as pension funds and sophisticated institutional investors, who understand that short-termism tends to produce negative outcomes over time and as such should be prepared to counter such tendency.

6/9  BIS central bankers' speeches  In the future, financial regulators will increasingly harness big data to detect and prosecute misconduct, and to identify weaknesses to focus on. In a recent case, the US SEC obtained a settlement against a broker-dealer for its failure to adequately train its representatives when they were selling certain complex debt instruments. Custom analytics tools, instead of traditional investigative techniques, were used to sift through millions of trading records. They helped identify over 8,000 retail customers for whom the investment in the debt instruments was inappropriate. This is how 21st century regulation and supervision should look like. Strengthening cyber risk management As financial services increasingly move online and FinTech becomes more pervasive, the key risk that financial institutions and regulators have to deal with is likely to be in cyber space. The core IT systems which are buried deep in financial institutions’ inner sanctums can now be reached by a hacker sitting on the other side of the world. Cyber risk is already a clear and present threat. The frequency, scale, and complexity of cyber attacks is worrisome. In February 2016, cyber-attackers gained access to the Bangladesh Central Bank’s payment transfer credentials and used it to steal $ from the Bank. Subsequently it was found that several other central banks had been targeted in the same way since 2013. In February 2017, malware was uploaded to the Polish and Mexican financial regulators’ website. These websites were then used to infect financial institutions’ IT systems whenever the regulators’ websites were accessed.
This intelligence was soon being fed back to Head Office. During the 20th century, this intelligence-gathering role was expanded. It has grown steadily, in scale and importance, since then. Today, the Bank’s 12 Agencies across the UK have around 9,000 regular company contacts providing real-time intelligence on the economy. Structured surveys from the Agents first appeared in 1997. Agents’ National Scores were first introduced in the mid-1990s and first published in 2006. Agent’s Company Visit Scores were first developed in 2007 and first published in 2015. 59 Brexit provides as good an illustration as any of the ways the Agents’ high-frequency, high-resolution intelligence can improve the Bank’s understanding of the economy. A key question recently has been whether and how companies have been preparing for Brexit.60 The Agents’ network was used not only to track how prepared companies were over time, but what form this contingency planning was taking – stock-building, seeking alternative suppliers, building cash reserves etc (Chart 26). 56  Haldane (2017). For example, Agerström et al (2016). 58 Bank of England (1963). 59 Ellis and Pike (2005). 60 Bank of England (2019). 57  44  All speeches are available online at www.bankofengland.co.uk/speeches  44  Chart 26: Contingency planning by firms for Brexit  Sources: Bank of England and Bank calculations. Company contacts also helped the Bank’s Brexit scenario planning. Companies were asked about the consequences for their businesses of a “no deal, no transition” Brexit. The results are shown in Chart 27.

Forth’s work suggests transport networks are a large part of the explanation. By analysing commuting times into Birmingham at different times of the day, he provide a measure of the “effective” working population. At peak times, the effective working population of Birmingham is perhaps 50% smaller than its measured population due to poor transport infrastructure. This helps explain why Birmingham punches below its  demographic weight. This is a terrific example of how high-resolution data can be used to understand local patterns of economic growth. The same data could be used to analyse the “effective” working population in other UK cities, perhaps helping explain their under-performance. It could also be used to answer industrial strategy  questions, such as what impact new transport routes have on the effective working population of the UK’s major cities and hence on their incomes through agglomeration effects. Imagine a transport strategy whose aim was to raise the effective working population of those UK cities currently operating below the line. Using Chart 22, doing so would raise UK GDP per head by around 10% or around $ £ in today’s money. Those annual benefits could be compared with the one-off costs of investment to determine the desirability of such a policy, as part of the UK’s industrial strategy. My second example draws inspiration from recent work at the University of Cambridge by Penny Mealy, including by my colleague on the Industrial Strategy Council Diane Coyle.
But, I’d like to start today by delving a little deeper into an overriding theme that heightens my concerns – and that is the challenge of operating in a “global” business and regulatory environment, while at the same time navigating an increasingly “local” business and regulatory environment. Global vs. local The evolution of financial services over the past several decades has resulted in a truly global financial system. Advances in information technology and data management, as well as the development of robust capital markets, greater competition among financial firms and international trade, among other things, have contributed to a faster, more highly interconnected, and more available financial marketplace. The financial crisis confirmed that what was once a fragmented and siloed system was now truly global: failures in one jurisdiction quickly transmitted disruption to other jurisdictions. During the crisis, we clearly saw the interconnectedness of firms, the complexity of the international financial system, and the global impact of bank failures. Through this experience, we identified gaps and weaknesses, both globally and locally, and supervisors, regulators and lawmakers from around the world all set out to put a system in place to avoid a repeat of one of the most economically devastating periods in our history. There has been substantial effort on the part of global regulatory and supervisory bodies to address the weaknesses identified in the financial crisis.

In this regard, I wish to make special mention of the Stock Exchange Technical Committee (SETC) First Initiative, the Commonwealth Secretariat, the West African Institute for Financial and Economic Management, the Team of local Lawyers headed by Mr Eke Halloway, as well as market practitioners in neighbouring countries who have been unrelenting in sharing their experiences and expertise with us. Naming people in these situations can be invidious, but let me crave your indulgence to mention Mr Maroof Matin, the Resident Consultant provided by First Initiative, Mr Jacob Kanu of First Discount House, Mr Melvin Tucker, former Deputy Governor and other members of the Stock Exchange Technical Committee. To all of these, I say thank you very much and please let us continue to work together for a more prosperous Sierra Leone. Thank you for your attention. 2  BIS Review 107/2007