samchain/econo-pairs-v1 huggingface dataset:
And from the end of March this year, the majority of new GBP Libor business should have ceased, further shifting demand to those increasingly deep and liquid risk-free rate markets. New sterling floating rate note issuance has almost exclusively referenced SONIA for some time. In the sterling swap market, the share of SONIA-referencing swaps has regularly dominated the Libor equivalent for 10 months now[1], with continued progress since the ‘SONIA-first’ interdealer quoting convention switch last year. [2] Indeed, the dealer to dealer market has completed a transformation in risk traded with SONIA in excess of 70% vs. Libor, with progress across all tenors. If we remove the direct market element and focus on pure inter dealer market, we estimate this is now in excess of 90% SONIA. [3] These positive developments in linear derivatives (e.g. interest rate swaps) have filtered through into more complex derivative markets, with SONIA swaptions, caps and floors widely available and infrastructure being put in place to support these products. Today is a further landmark, with another ‘SONIA first’ initiative as the interdealer market looks to shift liquidity in these more complex non-linear products from Libor to SONIA ahead of the upcoming end-Q2 milestone to cease new Libor linked issuance. [4] This is not to say there is an outright ban on trading Libor in nonlinear sterling markets after this milestone.

As we approach the points at which the Libor panels will cease, it is worth pausing to reflect on what the underlying challenges with Libor benchmarks are and making sure that in finding suitable replacements we move to solutions that don’t replicate those weaknesses. Any failure to address these weakness will pose risks in the domestic  Descending safely: Life after Libor ‐ speech by Andrew Bailey | Bank of England  Page 4  markets that use them but will potentially export those risks into other jurisdictions through international markets, for example through offshore markets, multi-currency lending and cross currency derivatives trades. We need to learn the lessons of Libor, and ensure we complete this transition in a way that minimises the risk of us having to undertake a similar exercise in the future. And across markets we have seen progress in building liquidity in those selected risk-free rates and demonstrating a wide use case. The tools are there to support use of these rates through the production of indexes and calculators that we are seeing emerge. The transition from Libor should be done once and it must be done right. As I have already mentioned, there has continued to be low levels of actual transactions in the markets Libor seeks to measure and the rate has had to remain heavily reliant on ‘expert judgement’.
The public sector cannot shoulder all the investment required for the green and digital transitions on its own. [5] Capital markets have a key role to play in allocating the private investment required and in complementing the financing provided by banks. Equity financing – especially venture and growth capital – plays a central role in funding innovative firms. Given equity investors’ greater risk appetite, a larger share of equity financing may be needed to drive green innovation. ECB research suggests that an economy’s carbon footprint shrinks faster when a higher proportion of its funding comes from equity rather than debt financing. [6] The EU still lags behind its global peers when it comes to developing venture capital markets. Although it has grown in recent years, EU venture capital relative to GDP is still only a fifth of that of the United States. Public investment at the European level can play an important role in crowding in private investment, while coordinated public-private investment can play a crucial role in kick-starting innovation. Furthermore, the EU and its Member States should strengthen their support for initiatives aimed at providing financing to small and medium-sized enterprises or funding EU-based start-ups and scale-ups. On the plus side, we are already seeing substantial growth in sustainable finance. Although sustainable finance products still only account for a small share of euro area capital markets[7], assets under management of environmental, social and governance funds have tripled since 2015 while the volume of outstanding green bonds has risen tenfold.

Transparency enhances the effectiveness of monetary policy by helping to guide the expectations of economic agents and bring them into line with policy objectives and actions. For these reasons, the ECB has striven to be as transparent as possible, communicating clearly, and by a variety of means, its policy objective, its strategy, its assessment of the economic situation, and its view of the outlook for price stability and associated risks. There is no doubt, however, that communication is a challenging task. I can assure you that we at the ECB – in light of the mandate that was assigned to us by the Maastricht Treaty and the trust and credibility we have earned from more than 313 million citizens – take this challenge very seriously. *** Chairman, Governors, Professors, dear friends, I have on behalf of the Executive Board and Governing Council of the ECB to thank all of you for having accepted our invitation and for having contributed so actively to the discussions. The ECB considers important to permanently guard against complacency and to remain open to criticisms and suggestions, to take regularly stock of the advances of academic research. I thank you for your attention. 2  BIS Review 110/2006
How do these changes in the labor market occur in the midst of a recession and recovery? First, many jobs are destroyed rapidly and few created as the economy weakens. This pattern is a defining characteristic of recessions. Afterward, during the recovery, employment rises as layoffs subside and firms begin to hire more. As this process plays out, some hiring will be in different industries from the layoffs. For example, some auto manufacturing jobs may never come back, while health care providers continue to add jobs. Thus, employers are adding two sorts of jobs: new and old. Some jobs are in industries that continued to expand jobs throughout the recession and weak recovery, such as health care and education. We think of these as “new jobs.” These shifts in jobs are transformational. They are part of how our region adjusts to the evolution of technology, trade patterns and consumer preferences. In addition, now that we are in recovery, a broad set of industries are beginning to add jobs to replace earlier layoffs, such as administrative support and wholesale  BIS central bankers’ speeches  3  and retail trade. We think of these as “old jobs” because they restore their industries’ share of jobs as economic activity picks up. The two recessions before the current one saw an unusually high share of “new job” creation – in expanding industries, rather than rebounds of “old jobs” – compared with recessions in the 1970s and 1980s.

Business investment in equipment and software is expanding, but investment in corporate office and other commercial buildings is weak. Some of the weakness in economic activity in the first half of the year was due to temporary factors such as the hit to household income from higher food and energy prices, and supply chain disruptions following the tragic earthquake in Japan. These restraining forces have abated and thus, we should see stronger growth in the second half. But it is clear that not all of the weakness was due to these one-time factors – and in light of this, I have revised down my expectations for the pace of recovery going forward. On the inflation front, the committee noted that inflation has moderated recently as energy and commodity prices have declined from their peaks – having picked up earlier in the year, mainly reflecting higher prices for commodities and imported goods, as well as the supply disruptions from Japan. Longer-term inflation expectations remain stable, and the committee now expects inflation to settle over the coming quarters at levels at or below those consistent with our mandate to promote full employment and price stability. In light of the current outlook, the FOMC in its statement noted that we now anticipate that we are likely to keep short-term interest rates exceptionally low at least through mid-2013. We also discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability.
Pan-European banks are an essential requirement if we are to have a single market for wholesale and retail financial services. That will provide both for gains in efficiency and cost reductions in banking services. And, moreover, it would contribute to improving the euro area’s stability in the face of shocks. In this respect, the culmination of the Banking Union with its three pillars and the subsequent creation of pan-European banks would also enable the link between sovereign risk and bank risk to be substantially mitigated. There has been significant progress on the first two pillars, the Single Supervisory Mechanism and the Single Resolution Mechanism. But the third pillar – the creation of a European Deposit Guarantee Scheme – remains pending. In conclusion, in Europe, and in Spain in particular, we have witnessed a phenomenon of greater disintermediation in recent years. Associated with it is a more significant role for capital markets when it comes to providing financing for the economy and channelling citizens’ savings. In parallel, technological change conducive to disintermediation is under way, and is prompting the creation of new services and risks that must be addressed by the supervisory community. To harness these market trends so as to promote the soundness and stability of Economic and Monetary Union, resolute progress must be made towards the greater European integration of banking markets, fomenting at the same time the development and integration of capital markets throughout the Union. Thank you. 7/7

Given that wage costs make up a large portion of the food sector’s costs, this difference in itself could explain the difference in prices. Detailed studies show that taxes, labour costs and other economic factors (e.g. GDP per capita and population density) may account for around half of the differences in food prices in Sweden and the EU.6 The other half appears to be largely attributable to lower competition pressures in Sweden than in other countries. That the price differences in relation to EU countries are due in large measure to the relative price competition is reinforced by the fact that there are also large price differences within Sweden, where the differences in wages and other costs between regions are small and the taxes the same. Studies7 show that the prices in the south-east and west of Sweden are around 8 and 5 per cent lower, respectively, than in the eastern part of the country. The prices in Greater Stockholm are some 6 per cent higher than those in the Greater Gothenburg area. This reflects the differences in shop structure in various parts of the country, with a much larger market share for low-price chains and other chain stores than for the three major players in southern and western Sweden than in eastern Sweden.
Credit providers are required to disclose the annual interest rate charged on a loan. Although, interest rates on loans and charges on services and products may vary significantly from one institution to another, it is incumbent upon all financial services providers to provide clear information and full disclosure on the costs and options available. It is also important for institutions to sensitise customers on what products may best suit their incomes and to educate them to borrow prudently. In this way, transparency is enhanced and consumers would have a clear picture of precisely how much they need to borrow relative to their income levels. This would result in responsible lending and a more competitive and transparent financial industry. However, financial education needs in Zambia are many and varied. They stem from inadequate understanding, by a good proportion of the population, of basic financial terms and concepts on the one hand, and a lack of knowledge of financial products and services that are increasingly available, on the other. To this end the Bank of Zambia through the FSDP in collaboration with stakeholders has developed a national financial education strategy for Zambia. The proposed national strategy for Zambia clearly identifies all the possible financial education delivery channels and responsible institutions in order to avoid duplication and waste of efforts during the implementation stage of the strategy.

Domestic default rates, while beginning to rise, are still low by historical standards, despite the fact that we are more than a year into the crisis. Those differences reflect the most important distinguishing feature of this downturn, namely its roots in global imbalances not just in trade but in the financial system. The growth and savings in emerging economies led to an extraordinary flow of funds back to the developed world and to the US in particular. That in turn kept interest rates low, allowing the rapid growth of credit and fuelling a sharp rise in asset prices and an increasingly risky search for yield – for example in sub prime housing in the US. The impact in the UK was different but no less marked. Here too the low cost of credit fuelled a spectacular expansion of bank balance sheets (Chart 3) and with it a growth in leverage (Chart 4). And, as Chart 5 shows, while savings rates fell in the UK, limiting the growth of  BIS Review 132/2008  1  retail deposits, banks financed that lending by tapping wholesale markets. The gap between customer lending and deposits moved from zero at the turn of the century to over £ billion in 2008 H1. Much of that funding was ultimately sourced overseas. In particular, the United States acted as an intermediary, attracting capital inflows from the rest of the world and exporting these funds to other countries.
Thank you for your attention. Les notes du Conseil d’analyse économique, Pour une refonte du cadre budgétaire européen, Avril 2021 Abiad A., Furceri D., Topalova P., The Macroeconomic Effects of Public Investment: Evidence from Advanced Economies, IMF Working Paper, May 2015. iii The American Crisis (circa 1776) i  ii

Fritz Zurbrügg: Financial market developments, management of foreign currency investments and Libor issues Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 13 December 2012. *  *  *  In my remarks, I would like to examine three topics. First, I will expand on what, in our view, are the most important developments in the financial markets since the news conference in June. Afterwards I will address the management of our foreign currency investments. Finally, I will explore some of the issues surrounding the Libor rate, and the global discussion on reference interest rates in money markets generally. Developments in the financial markets As already mentioned by my colleagues, the situation on the international financial markets has eased somewhat since the last news conference. This stabilisation was mainly due to the announcement in late summer by various central banks of a further expansion of unconventional measures. In Europe, the unequivocal declaration by the European Central Bank (ECB) to safeguard unity in the euro area had an especially calming effect on markets. Under its Outright Monetary Transactions (OMT) programme, the ECB announced that it would purchase, under certain conditions, unlimited quantities of government bonds with a maximum term of three years. The bonds of peripheral euro area sovereigns, in particular, benefited from OMT. Yield spreads over German government bonds have declined, although they remain at a high level.
In the globalised world, such co-operation is more important than ever if our economies are to be able to meet future challenges successfully. I have been asked to give a brief overview of Hong Kong, with particular emphasis on how this city is developing its Islamic finance capabilities. Hong Kong’s strength as a free and open international financial centre has helped nourish its deep and liquid financial markets. Yet maintaining a free and open market in such a turbulent world is not an easy task. It is therefore reassuring that Hong Kong’s monetary and financial systems have continued to be sound and robust, reinforced by a number of recent contingency measures to strengthen financial stability. There are many factors that underline the resilience of Hong Kong's financial markets: I would like to highlight two. First, even when extreme volatility prevailed in the global foreign exchange markets following the collapse of Lehman Brothers, the exchange value of the Hong Kong dollar remained firmly anchored even as other major currencies suffered wide fluctuations, causing a ripple effect to other currencies in the region. Several reasons accounted for this extreme global volatility: the repatriation of large amounts of capital to the US to rescue the market; repositioning by those outside of the US who came to realise the severity and the contagiousness of the crisis; and deleveraging of large amounts of exchange and interest rate arbitrage activities triggered by the financial crisis. These volatile conditions should, in theory, be destabilising for the Hong Kong dollar.

Given the growth in this market, credit exposure by banks and securities firms to the overall hedge fund sector may be higher than in 1998, but is likely spread more widely across funds. While there may well be more diversity in the types of strategies hedge funds follow, there is also considerable clustering, which raises the prospect of larger moves in some markets if conditions lead to a general withdrawal from these “crowded” trades. Overall, hedge funds can play a beneficial role in the U.S. financial system. They contribute to one of the defining strengths of our financial markets: the ease with which we match capital to ideas and innovation. They represent one aspect of a broader, quite favorable, trend toward a greater diversity of participants in U.S. financial markets and in that respect, they contribute to a broader spreading of risk. But they also present risks to the financial system. The extent of the risk they present to the system as a whole depends significantly on the prudence of the institutions that enable them to increase leverage. The improvement in market practice in managing counterparty credit risk since 1998 is encouraging, but it is important that firms continue to strengthen those disciplines. At the most fundamental level, intermediaries providing credit to hedge funds need to ensure that the terms and conditions of their provision of credit - including the contingent credit that is an increasing feature of prime brokerage arrangements - appropriately reflects the risks involved.
That frontier is defined by speed. The average speed of order execution on the US NYSE has fallen from around 20 seconds a decade ago to around one second today. These days, the lexicon of financial markets is dominated by talk of High-Frequency Trading (HFT). It is not just talk. As recently as 2005, HFT accounted for less than a fifth of US equity market turnover by volume. Today, it accounts for between two-thirds and three-quarters. The picture is similar, if less dramatic, in Europe. Since 2005, HFT has risen from a tiny share to represent over 35% of the equity market. In Asia and in emerging markets, it is growing fast from a lower base. What is true across countries is also true across markets. HFT is assuming an ever-increasing role in debt and foreign exchange markets. In some futures markets, it already accounts for almost half of turnover. In the space of a few years, HFT has risen from relative obscurity to absolute hegemony, at least in some markets. HFT itself is far from monolithic, comprising a range of strategies. 3 Some involve high-speed liquidity provision, which is akin to market-making. Others involve statistical arbitrage, using trading algorithms to detect and exploit pricing anomalies between stocks or markets. Because these anomalies tend to be eliminated quickly, HFT algorithms have to be highly adaptive, not least to keep pace with the evolution of new algorithms. The half-life of an HFT algorithm can often be measured in weeks.

But, on the other hand, since we only have limited experience of macroprudential instruments, a step-by-step approach may seem more attractive. Furthermore, even if the first best solution would be bold steps, it may be more difficult to gain consensus for these. I think it would be better and more reasonable to take a number of small steps in order to avoid inaction bias and a standstill in reforms. Taking Sweden as an example: in its biannual Financial Stability Report, the Riksbank outlines several alternatives for how the growing risks associated with increasing household debt may be managed. The second issue that needs to be addressed is how macroprudential policy should interact with other policy areas when it comes to tackling systemic risk. My view is that monetary policy could take systemic risk into consideration under the precondition that this doesn’t conflict with the objects of monetary policy. That is, if the object of monetary policy is inflation targeting, monetary policy may very well serve as a line of defence if inflation is not too far from the target and if inflation expectations are firmly anchored.1 However, macroprudential policy also has links to microprudential policy and fiscal policy. All these policy areas may need to be involved in order to curb systemic risks in the most effective way. What instrument to choose in a specific situation should depend on the problem at hand and the purpose of the policy action. The most effective tool may not always be in the hands of the macroprudential supervisor.