samchain/econo-pairs-v1 huggingface dataset:
In addition, as a result of the financial crisis in the international markets, the trading of some securities, which were previously considered as favourite to the investors, has become challenging Second, the differences in the size of the banking sector’s institutions, the collateral’s quantity and quality, and the restrictions for the direct exposure among institutions hamper the circulation of liquid funds in the interbank market in the duly time and extent. Third, given the enhanced competition, there is a risk that significant disproportions arise between assets and liabilities in the balance sheet, with regard to type of currency and maturity term; Fourth, some institutions have also turned to borrowing from parent banks in order to maintain the lending promptness and size; Fifth, owing to objective factors that have conditioned the lack of efficiency, the banking sector at home has been characterized by very high liquidity levels. Given the enhanced competition and improved efficiency, it is objectively expected that liquidity indicators being to shift downward. These factors hamper the setting of the optimum liquidity level, in which the enhanced efficiency in fund use does not shackle the institution’s capacity to cope with the business risks. All these elements provide evidence for the need that the banks’ governing structures follow practices that allow the institution itself to meet the expected liquidity needs independently, however, having options which improve their capacity to generate liquidity in urgent cases.

There is, of course, a circularity involved, since liquidity depends on valuation, fair value must be based on a market price, and the ability to price an asset itself depends on sufficient liquidity in the market. The difficulty to get out of this circularity in periods of stress is currently creating significant uncertainty. Another example is risk measurement. In a securitized world, investors heavily depend on rating agencies for information about the risks attached to various instruments. These agencies have been strongly criticized recently. It is not my purpose to enter into any blame game. Suffice it to say that there has been a deep misunderstanding between investors and rating agencies as to the scope and true meaning of ratings. Most investors were not fully aware that rating did not encompass liquidity risk; nor did they realize that ratings for structured products were intrinsically more volatile than for more simple "plain vanilla" securities. The use of identical metrics for rating what are fundamentally different categories of assets certainly did not help and may have contributed to the confusion. Some observers have argued that investors should be faulted for relying too much on ratings. Instead, the argument goes, they should do their homework and put themselves in a position to directly assess risks. But it is doubtful that we can dispense of the rating process. If each and individual investor had to carry their own due diligence, the costs of gathering information would be prohibitive and this would introduce important frictions in the functioning of the market.
But to re-emphasise, decisions about the precise trade-off that the MPC pursues are subject to the limits provided by its statutory objectives and the Chancellor’s remit. And they are disciplined by the transparency and accountability mechanisms including Inflation Reports, the minutes and transcripts of its meetings, the Parliamentary testimonies of its members, the open letter process triggered if  3  Nordhaus, W D (1975), “The political business cycle”, Review of Economic Studies. See, inter alia, Kydland, F and Prescott, E, (1977), “Rules rather than discretion: the inconsistency of optimal plans”, Journal of Political Economy, 85(3), 473-492; Barro, R, and Gordon, D B, (1983). "A Positive Theory of Monetary Policy in a Natural-Rate Model". Journal of Political Economy. 91 (4): 589–610. 5 See Rogoff, K (1985), “The optimal degree of commitment to an intermediate monetary target”, Quarterly Journal of Economics, November, pages 1,169–90. 6 The ‘engineering’ view is primarily concerned “with logistic issues rather than with ultimate ends”, including their ethical characteristics. “The ends are taken … as given, and the object of the exercise is to find the appropriate means to serve them”. See Sen, A K (1987), On ethics and economics, Blackwell. 4  3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches  3  the inflation target is missed by more than one percentage point, and discussions and debates in public fora such as this one. The balance of my remarks this evening will concentrate on the experience with such trade-offs, which have become more common of late for two reasons.

In the simplest New Keynesian model, these are, first, the “IS” curve, which traces a negative relation between output and the (ex-ante) real interest rate (𝑖𝑡 − 𝐸𝑡 𝜋𝑡+1 ): 1 𝑦𝑡 = 𝐸𝑡 𝑦𝑡+1 − (𝑖𝑡 − 𝐸𝑡 𝜋𝑡+1 ) 𝜎 This equation comes from the optimisation problem of households who choose consumption to maximise their lifetime utility. 𝐸𝑡 denotes the mathematical expectations operator. The term in expected output, 𝐸𝑡 𝑦𝑡+1 , appears on account of households’ desire to smooth consumption. The real interest rate enters this condition because ultimately households care about their real consumption levels and it is the real interest rate that is relevant for transferring these consumption levels, via saving, across time. The parameter 𝜎, the intertemporal elasticity of substitution, controls the size of this effect. 31  In the simplest monetary models, the natural level of output (or “trend output”, if you like), is exogenous (e.g. is determined by TFP alone).
Nout Wellink, President of the Basel Committee on Banking Supervision and Governor of the Central Bank of the Netherlands, quotes Charles Kindleberger, saying in his famous book "Manias, Panics and Crashes", that the "financial crises are typically a result of extended accumulation of imbalances preceded by certain exogenous shock, or structural changes in the financial system. The examples are in the changes in the political environment, new regulations and financial innovations. These changes create new possibilities, but also, uncertainties and lack of awareness of potential risks from the so-called unknown-unknowns". In such environment, says Wellink, "the traditional checks and balances can become inappropriate and can easily result in excessive risk". Really, we have faced:  2. 4  •  Fiscal and balance of payments deficits, which failed to be treated because there was no enough good will for that in the globalized world, and accordingly to discuss about the foreign exchange rates. •  Huge imbalances in the financial sector, the dimensions of which grew to explosion. While the savings rates were decreasing with a limited rise in the households' deposits being registered, the banks were filling in the gap between the retail deposits and the credit growth by using sources from the wholesale markets. For example, in England, the gap between the lending to clients and the deposits climbed from zero, in the beginning of the century, to over British Pounds 700 billion in the first half of 2008, says Sir John Gieve, Deputy Governor of the Bank of England.

This institution has supported the Romanian banking sector too, especially during the privatization process. Joining MIGA finalized the normalization process. 1/3  BIS - Central bankers' speeches  Throughout the 1990s and up until the EU granted Romania the functional market economy status in 2004, and later on, until the actual EU Accession in 2007, the IMF and the World Bank have been our main economic and financial external partners, during the transition. It goes without saying that one central pillar of this transition was represented by the continuous reforms of the national legislation regarding the central bank and the financial sector reforms, which have benefited from the extensive contributions of IMF and World Bank staff. For instance, the essential legislation governing the banking system was drafted with the assistance of IMF experts. In this context, I would like to mention the seven IMF Stand-by Agreements that, in addition to the Balance of Payments support, have also contributed to the implementation of structural reforms prior to the EU accession. Similarly, the World Bank's programs have contributed to the development of the Romanian financial and banking system (e.g. the Financial and Enterprise Sector Adjustment Loan (FESAL) – focused on reforming the financial sector, and the Private Sector Adjustment Loan (PSAL) – offered support towards the privatization of the Romanian banks and to the development of the monetary and capital market). During this transition period marked by major changes, I would like to highlight one element of continuity.
Undoubtedly, there has been a significant shift in global perceptions of the seriousness of cyber threats across the board, be they in the realm of politics, business, finance, or the media. For financial institutions, while cyber threats at one point may have been regarded as a relatively minor cost of doing business, it is not an exaggeration to say that they are now viewed as potential existential threats, not just to individual firms but also to the broader financial system and critical infrastructures that support it. As central banks with broad mandates for financial stability, this is certainly a concern for us all. For the Federal Reserve, a cyber breach at one of our central bank customers last year led to authenticated yet fraudulent SWIFT messages being sent to us to wire out substantial sums of money. While neither SWIFT nor Federal Reserve systems were breached, this incident was a strong reminder that the robustness of our customers’ internal control environment is a matter that concerns the entire central bank community. We recognize the challenges and complexities in strengthening prevention, detection, and incident response regimes around processing of fraudulent payment instructions. SWIFT users span the full range of IT sophistication and capacity, and remediating deficiencies in prevention and detection may require a substantial re-orientation of priorities and resources for some institutions. Overcoming these obstacles will be no easy task, but so long as there is a weak link in the cybersecurity chain cybercriminals will seek to exploit it.

Second, the Federal Reserve and African central banks maintain direct operational ties through the U.S. dollar correspondent and custody accounts that many central banks in this room hold at the New York Fed. African countries represent approximately one-quarter of the total number of the Federal Reserve’s foreign official accountholders, the second largest regional representation, with some very long-standing account relationships. Let me speak for a moment about the role of our services to the global central banking community. The Federal Reserve’s provision of U.S. dollar account services to the global official community stems from our recognition that central banks around the world have a mutual need for correspondent banking and custody services to execute on core central banking functions in which the safety, confidentiality, and reliability of service provision is essential. Given the global 1/2  BIS central bankers' speeches  role of the U.S. dollar as a reserve currency, we recognize the special role that our account infrastructure plays in supporting policy implementation by central banks around the world. As such, we devote significant attention and resources to maintaining a robust operational and risk management culture. This allows us to continue to provide these services for the benefit of the global central banking community. This brings me to the third reason why enhancing relationships with African central banks is a high priority for us, and that is the need for stronger dialogue on the evolving risk environment in cross-border payments.
For all actors in the financial industry, including for the Banque de France and the ACPR, the digital revolution is creating challenges but also incredible opportunities that are just waiting to be seized, whether by FinTechs themselves, by the entire financial system – banks and insurers – or by the French and European economy as a whole. 1  1. What are the challenges for FinTechs? It’s hard to imagine how we would get by today without cash-gifting sites to fund events, aggregators to draw together our different bank accounts, or peer-to-peer payments to split restaurant bills or rents for flat-shares. Steve Jobs coined the well-known mantra: “simplicity is the ultimate sophistication”, and I think all of these innovations have managed to offer a simple, often cheaper solution to new user habits and needs. They combine cutting-edge technology with user-friendly interfaces. And, in many cases, they’ve been developed by nimble start-ups that are in tune with the market and have the freedom to think outside the box. Today, France is Europe’s second biggest crowd-funding market, after Great Britain, and one of the most dynamic markets in Europe for payment innovations. Today, what I want to say is this: we are learning from you. Through your technology, you too can contribute towards making the financial system more secure.

Svein Gjedrem: Current monetary policy issues in Norway  Speech by Mr Svein Gjedrem, Governor of Norges Bank, at the General Meeting of ACI Norway, held in Tromsø, on 19 August 2000. *  *  *  Introduction I would like to start by expressing my thanks for being given the opportunity to give this presentation of monetary policy in Norway. I will start my presentation with a brief review of the basis for monetary policy, and will go on to mention some of the considerations and reasoning behind Norges Bank’s recent setting of interest rates. Finally, I will turn to certain structural features of particular importance to developments in the capital account balance which can shed light on the relationship between the setting of interest rates in Norway and international interest rate developments. The basis for monetary policy The chart shows movements in the krone exchange rate between 1980 and the present. There have been three major crossroads since 1986. Chart 1 Krone exchange rate  •  Following the last devaluation in May 1986, the Norwegian authorities decided to introduce a fixed exchange rate system for the krone. The monetary policy authorities bound themselves to the mast. Under this system, the interest rate was to be set solely with the aim of maintaining exchange rate stability within narrow margins. At the same time, the krone was supported through extensive exchange-market interventions. The fixed exchange rate system led to a gradual slowing of price inflation.
To date, they have focussed on items such as groceries and clothing. Although early days, the potential benefits in terms of increased sample sizes and granularity seem to be considerable. For example, the ONS have so far collected 7,000 price quotes per day for a group of 27  grocery items, which is larger than the current monthly collection for those items in the CPI. For GDP measurement, new sources and methods are also gaining ground. One recent study used satellite imaging to measure the amount of non-natural light emitted from different regions of the world. This has 28  been found to have a statistically significant relationship with economic activity. This approach could  potentially help in tracking activity in regions that are geographically remote, where statistical surveying techniques are poor or where mismeasurement problems are acute. A more down-to-earth example, used by the UK’s ONS and other statistical agencies, is so-called administrative data. This includes data collected by government agencies as part of their activities – for example, on tax revenue and benefit payments. In the UK, some of these data have recently become available for wider use through the government’s Open Data initiative, albeit subject to important checks. 23  Coyle (2014). Fouquet and Broadberry (2015). 25 Cavallo and Rigobon (2016). 26 Cœuré (2017). 27 See https://www.ons.gov.uk/economy/inflationandpriceindices/articles/researchindicesusingwebscrapedpricedata/august2017update 28 Henderson, Storeygard and Weil (2011).

Ensuring AMRO’s success is a shared responsibility. Let us work together to make AMRO a strong and credible institution, reputed around the world for its expertise in the economic affairs of our region. 27. 4  Thank you. BIS central bankers’ speeches
At the same time, it is of course desirable that the measures targeted at household indebtedness and the housing market do not in themselves lead to an economic downturn or unnecessarily obstruct monetary policy. The primary aims of policy in this area must be to ensure that the build-up of household debt slows down, that the households gradually become more resilient to shocks of various kinds and that the housing and mortgage markets become more effective. This is thus a question of a long-term adjustment process that must take place in suitablylarge steps. The amortisation proposal – a step in the right direction I see last week’s amortisation proposal as one such suitably-large step in the right direction. As only new mortgages will be covered, increased amortisation will be phased in over a long period of time. In combination with many new mortgage borrowers already amortising, and because the proposal entails only a moderate increase in amortisation rates, this means that the macroeconomic consequences will probably be small during the first few years. According to the Riksbank’s estimate, the amortisation proposal will have reduced the household debt ratio by 0.6 percentage points after five years compared with a base scenario. This means that the proposal will increase amortisation payments by less than 0.1 per cent of GDP per year during the period.5 The amortisation proposal thus appears to be well balanced at the moment, but work on the long-term adjustment process must continue. There are many factors to take into account when considering further measures.

This support will continue to be provided by the net asset purchases until the end of the year, by the sizeable stock of acquired assets and the associated reinvestments, and 6/7  BIS central bankers' speeches  by our enhanced forward guidance on the key ECB interest rates. Thank you. 1 In moving annual sums. Source: US Department of the Treasury. 2 See Cœuré, B. (2017), “The international dimension of the ECB’s asset purchase programme”, speech at the  Foreign Exchange Contact Group meeting, 11 July. 3 See also Bergant, K., M. Fidora and M. Schmitz (2018), “International capital flows at the security level – evidence  from the ECB’s asset purchase programme”, ECMI Working Paper No 7. 4 For quantitative evidence, see Cœuré, B. (2017), “Monetary policy, exchange rates and capital flows”, speech at  the 18th Jacques Polak Annual Research Conference hosted by the International Monetary Fund, Washington, 3 November. 5 See Cœuré, B. (2018, op. cit.). 6 See Cœuré, B. (2018), “Forward guidance and policy normalisation”, speech at the Deutsches Institut für  Wirtschaftsforschung, 17 September. 7 See, for example, Rey, H. (2015), “Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy  Independence”, NBER Working Paper No 21162. 8 See Cœuré, B. (2018, op. cit.). 7/7  BIS central bankers' speeches
And we should remember that banks, owing to MREL requirements, will have to issue a lot of these instruments in the coming years, a task that has been made easier in recent months by the ECB’s monetary policy. In addition, there is evidence that banks with higher solvency levels are those best adapted to uphold their profitability against a background of negative interest rates. One way of evaluating the suitability of banks’ solvency levels involves subjecting them to stress tests. The Banco de España performs such exercises annually on all Spanish institutions. To do so it takes as a starting point highly granular data from the balance sheets of banks at the close of the previous year and defines a baseline macroeconomic scenario which coincides with the forecasts of the Banco de España available at the time the exercises are performed. It then takes another, stressed scenario, which seeks to reflect the effect of the risks identified previously materialising. The difference between both scenarios reflects the degree of stress of the exercise which, in the test this year, is slightly higher than that of the previous year owing to the intensification of the risks mentioned in the first part of my address. While the results of these tests will be published in greater detail in the forthcoming Financial Stability Report, allow me to offer you in advance some of the main conclusions. The results obtained in relation to the resilience of Spanish banks as a whole are, in general, positive.

But we are now at a critical point in the timeline. The very complexity of this issue is why the industry cannot afford to wait any longer. The clock is ticking, and there are 901 days left. 1 Alternative Reference Rates Committee, Second Report, March 2018. 2 Financial Stability Oversight Council. 2018. Annual Report. Washington (revised June 20, 2019). 3 International Organization of Securities Commissions, Principles for Financial Benchmarks, Final Report, July  2013. 3/3  BIS central bankers' speeches