samchain/econo-pairs-v1 huggingface dataset:
Research at the Bank exploits micro-level information to give more insight into NBFIs portfolio decisions, in the hope of better understanding how spreads and premia will evolve. The confluence of, on the one hand, better data resulting from post-financial crisis increased regulatory scrutiny of NBFIs and a shift towards more centralised and transparent trading at CCPs and, on the other hand, greater computing power and advances in data analytics has permitted a much more disaggregated assessment to be made. Studies have identified more precisely the ‘preferred habitats’ of various NBFIs across the spectrum of available assets, as well as the cascades of asset sales underlying the so-called ‘dash-for-cash’ at the outset of the pandemic. [14] Better understanding the financial frictions that explain these features of portfolio choices and market behaviour is central to developing a more structural view of monetarist channels in the transmission mechanism of monetary policy. After all – and as Lord King identified two decades ago – if monetary quantities affect the magnitude and incidence of transaction costs in financial markets, they will influence spending and pricing decisions – and thus inflation – via channels that are not captured simply by changes in policy rates. Understanding those frictions and how money can alleviate them constitutes the route to developing a structural understanding of QE transmission. Page 11  At the macroeconomic level, we are still some way short of having that structural view.

But in the aftermath of the global financial crisis – with a long-term downward trend in the equilibrium real interest rate, R-star; with nominal policy interest rates stuck for long periods at their effective lower bound; and with disruptions in the financial sector impeding the traditional transmission of monetary policy – the use of QE and other balance sheet policies by central banks has become mainstream. Pace Poole, QE policies have largely been expressed in quantitative terms (even if that approach has been somewhat watered down over time). For example, at the Bank of England QE measures have been announced in terms of changes in the stock of gilt holdings in the special facility created to manage the asset portfolio. Such an approach inevitably begs the question of whether, and if so in what form, monetary quantities have re-asserted themselves in the conduct, transmission and communication of monetary policy. More generally, the financial crisis and its aftermath have demonstrated that financial markets are subject to periodic disruption. This questions the assumption – embedded in much of traditional finance theory – that equilibrium yields are independent of the quantities of the supplies of different assets. Failure of that assumption opens up scope for monetary quantities to have an important influence over a wide range of asset prices and risk premia, and thereby play an important role in monetary policy transmission.
All indicators point to a general decline in confidence, both of consumers and investors. This decline is not unique to France; on the contrary, it is much stronger in our partner countries and particularly in the United States. Indicators, however, only provide information on the near future. Beyond one or two quarters, forecasts are based more on analysis, debate and judgement. In the present circumstances, this is particularly difficult. This is perhaps why, over the past few days, a current of opinion bordering on an intellectual vogue has prevailed, with a view that any banking crisis is bound to have far-reaching and long-lasting consequences. Along these lines, the optimists refer to the Swedish experience in the 1980s, which was marked by almost three years without economic growth, and the pessimists allude to Japan's "lost decade" following its banking crisis. However, a comparison is misleading. The situation today is profoundly different. First, as I have said, our banks, and particularly French banks, are financially sound. Furthermore, the reaction in terms of economic policy has been particularly rapid and vigorous.

We are ensuring that these earnings are reported using the strictest standards. In all likelihood, this trend – of lower but positive profits – should continue for the rest of the year. Third, our banks have regular sources of income. They are universal banks. This sets them apart from banks in some other countries that depend exclusively, or for the most part, on the financial markets. Our banks have sound and revolving sources of future profits. This is a vital asset at a time when it is difficult to raise capital by issuing shares on the market. Lastly, the “manoeuvrability” of our banks remains excellent and they are now ready to play their role in the possible restructuring of the international financial sector. These facts give me reason for confidence. Beyond the sometimes serious tensions and incidents that have affected the recent period, our banks may be justly proud of the progress in terms of productivity and innovation that they have made in the last two decades, which now positions them to cope effectively with turmoil that may occur in the future. 2  BIS Review 130/2008  Public policy during the crisis Over the past two weeks, we have witnessed a marked change in public policy with regard to financial institutions. Having hitherto been exclusively geared to providing liquidity, public intervention is now also aiming to support banks’ financing and own funds. This shift in stance is significant. The problem of liquidity remains crucial at this stage of the crisis.
The “non-cash” euro is already in use The final stage of the introduction of the euro will include two changeovers: the changeover to the noncash euro, which concerns all book-entry transactions (cheques, bank accounts, bank card payments, transfers, loans, etc.) and the changeover to the cash euro, which concerns banknotes and coins. This summer, banks in France started to systematically convert bank accounts into euros and provide customers with euro cheque books. In various participating countries, in particular France, all bank accounts have already been converted . It is now up to each citizen in the euro area to establish a new scale of values for the currency and to make payments in euro. In this respect, retailers have a fundamental role to play: their active participation and their readiness to accept payments in euro will greatly facilitate the euro changeover as a whole. The cash euro will be in circulation within 8 weeks As regards the cash euro, the main task now consists in frontloading the banknotes and coins so that, on 1 January 2002, transactions can be carried out smoothly in the best possible security conditions. To achieve this, frontloaded coins are supplied to credit institutions. Banknotes will soon be provided to them (as of 1 December in France). Retailers will also be provided with frontloaded banknotes and coins.

The recent European Council meetings in Stockholm in March 2001 and Gothenburg in June 2001 confirmed these guidelines and even added a number of important issues such as the consequences of the ageing population in the European Union, the role of biotechnologies in economic growth, and the environment. The European Heads of State and Government, meeting in Ghent a couple of weeks ago, called for an acceleration of the whole process. All European countries must resolutely pursue the reforms they have already initiated. It must be acknowledged that much has already been done, in particular with the implementation of the single market. However, continental Europe is still experiencing levels of unemployment that are too high, despite the fact that the unemployment rate has been declining significantly in most of its economies for the past three years. According to the IMF, the OECD and central banks, 75% of unemployment is of a structural nature, i.e. generated by an environment which handicaps job creation. There is no doubt that EMU stimulates structural reforms on the labour market. With increased capital mobility and the smooth functioning of the single market, firms will become increasingly sensitive to the general environment in terms of their competitiveness when choosing a particular location in the euro area. The actual process of selecting an investment location within the euro area will be a major incentive for undertaking the necessary reforms. b)  Besides structural reforms, a strong emphasis must be placed on competitiveness.
At the same time, however, the global scope of the sanitary emergency has favored the sharing of knowledge among those in charge of controlling it, and practices that seem to have worked better in some countries can be adopted. Meanwhile, the simultaneous nature of the economic shock has led every Central Bank and government to promote measures in the same direction, providing greater support to prevent an economic meltdown. Our country is also making great efforts to mitigate the impact of this emergency on the population’s wellbeing. The government has announced a series of measures, at a cost of USD 11.5 billion, aimed at protecting employment and household income, while at the same time ensuring the continuity of businesses. In the CBC, we have taken swift decisions to mitigate the effects of this new scenario. First, over a period of two weeks we lowered the Monetary Policy Rate (MPR) by 125 basis points to its technical minimum of 0.5%. Then we introduced a set of extraordinary measures for a total in the order of USD 19 billion, to ensure adequate access to credit and the normal functioning of financial markets. These measures seek to preserve the correct transmission of monetary policy and facilitate the flow of credit to companies and individuals in need of financing to overcome this complex stage. 1  The package of measures that the Bank has implemented is very significant and should provide meaningful support for businesses and households to withstand this emergency.

The Federal Reserve believes that the goals of agency action and legislative change should be (1) to ensure that supervisory agencies have access to high-quality and timely data that are organized and standardized so as to enhance their regulatory missions, and (2) to make such data available in appropriately usable form to other government agencies and private analysts so that they can conduct their own analyses and raise their own concerns about financial trends and developments. In my testimony this morning I will first review the data collection and analysis activities of the Federal Reserve that are relevant to systemic risk monitoring and explain why we believe additional data should be collected by regulatory authorities with responsibility for financial stability. Next I will set forth some principles that we believe should guide efforts to achieve the two goals I have just noted. Finally, I will describe current impediments to these goals and suggest some factors for the Congress to consider as it evaluates potential legislation to improve the monitoring and containment of systemic risk. 12  BIS Review 16/2010  The Federal Reserve and macro-prudential supervision The Federal Reserve has considerable experience in data collection and reporting in connection with its regulation and supervision of financial institutions, monetary policy deliberations, and lender-of-last-resort responsibilities. The Federal Reserve has made large investments in quantitative and qualitative analysis of the U.S. economy, financial markets, and financial institutions.
Whilst in Switzerland disturbances affecting, in particular, the demand for central bank money “for reasons still unknown” have increased in recent years, the ECB faces additional uncertainties at the beginning of Monetary Union in terms of the effects of the shift of regime to a single monetary policy in Europe. It is difficult to assess whether conventional and reliable macroeconomic relationships are changing as a result of the introduction of the euro. In view of these uncertainties, but also in general, it is unwise to rely on a few indicators or only one when making monetary policy decisions. Indeed, to date our studies have  BIS Review 99/1999  2  revealed that the M3 monetary aggregate shows clear signs of stability and healthy indicator properties. This provides a sound basis for the prominent role given to the M3 monetary aggregate. Monetary policy instruments and the operational framework of the Eurosystem The operational framework of the Eurosystem has proved to be an effective instrument for steering money market interest rates and for limiting fluctuations. The Eurosystem controls money market interest rates by means of either the provision or withdrawal of liquidity in the banking system. Open market operations play an important role in the context of monetary policy strategy. The weekly main refinancing operations give an indication of the Eurosystem’s monetary policy and provide the largest share of liquidity. Longer-term refinancing operations provide the banking system with longer-term liquidity (three months).

Indeed, the global financial crisis witnessed unprecedented levels of global cooperation as the world came together to pursue a common interest of restoring stability and building more sustainable financial systems. In the same manner today, the future of finance demands strong leadership and cooperation in fostering collective will towards achieving the necessary positive transformation. The Responsible Finance Institute, as a think tank connecting various responsible finance practices and expertise around the world, is in a unique position to contribute towards realising this aspiration. But for responsible finance to gain real traction, this cannot be an undertaking of a single institution. Finance, with its potential to serve society, is capable of so much more. As responsible global financial participants, the opportunity to come together again to rebuild trust and provide the foundations of a more stable and sustainable long-term economic growth can be achieved through our commitments to responsible finance. The call is for greater global cooperation and leadership to unlock the future of finance and expand its positive impact in the global economy. With that, I wish you an engaging and impactful summit. BIS central bankers’ speeches  3
But the large fluctuations in growth rates, capital flows and exchange rates are in themselves problematic and create uncertainty regarding economic developments in the emerging markets. A divided Swedish economy The Swedish economy is dependent on developments abroad, and of course has been affected by the financial crisis and economic downturn in recent years. In an international comparison, overall quantities such as GDP and employment have nevertheless developed well since the financial crisis. BIS central bankers’ speeches  1  However, behind the overall picture is a divide, where household finances in particular have been strong. Their disposable incomes have increased every year during and since the crisis (see Figure 1). Growth in consumption has also been good. Housing prices and loans to households have increased rapidly, probably partly due to strong households finances and an expansionary monetary policy (see Figures 2 and 3). Developments in the corporate sector have been weaker, which is reflected in weak growth in exports, low investment and only modest growth in loans to companies (see Figure 4).

Vítor Constâncio: The nature and significance of Banking Union Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the conference “Financial regulation – towards a global regulatory framework?”, Chatham House City Series, London, 11 March 2013. *  *  *  Ladies and gentlemen, Thank you for inviting me to speak to you at Chatham House today. The topic of my address is the nature and significance of establishing a Banking Union in Europe. To many this seems like a new initiative borne out of the experience of the crisis. But it is in fact based on an older debate. During the preparations for the Maastricht Treaty in the early 1990s, there was already the strong conviction that a single system of banking supervision was as a key element in the construction of monetary union. Indeed, one of the foremost proponents of this view was a Bank of England official, Brian Quinn, who chaired the preparatory subcommittee on banking supervision.1 This conviction was based on the relatively logical observation that the single currency would deepen financial interdependence in Europe and so require an integrated system of supervision. It was also in line with the prevailing model at the time of banking supervision being entrusted to the central bank.
Accordingly, better than expected outcomes in food and energy prices or in other global factors will be perceived as an opportunity to bring down inflation faster than that is implied by the revised target path. Should the upside risks materialize; monetary policy will be conducted so as to minimize any upside deviation of inflation from the revised targets. Target revision is the solution that is provided by our Bank to the aforementioned “problem of demarcation”, which is faced by almost all central banks today. However, the revision will work only if necessary policy stance is adopted. For this reason, the second pillar of monetary policy comprises the implementation of a monetary tightening that is consistent with the new inflation targets. Newly set targets are references that would help decision  BIS Review 82/2008  5  makers in the economy understand the reasoning behind the policy stance, i.e. the factors that have led to monetary tightening and the extent of monetary tightening if and when necessary. In other words, the Central Bank has announced, via the target revision, the limits of its tolerance to the first round impacts of supply side shocks. Dear Guests, In this part of my speech, I would like to cover the Central Bank’s reasons for implementing a measured course of monetary policy tightening, in further detail. Obviously, interest rate decisions are not taken in order to curbe hikes in food and energy prices. It is not possible to control direct effects of supply side shocks with monetary policy tools.

The Swedish banking sector was one of the first in Europe to be consolidated, largely because the banking crisis speeded up the restructuring process. The consolidation enabled Swedish banks at an early stage to rationalise overlapping branch networks and to reduce staff numbers. Even though several EU countries now have caught up with or even passed by us in terms of consolidation, the Swedish banking sector stands out by having the lowest number of both branches and employees per capita in the EU15. That might indicate that the limited improvement potential is due to Swedish banks already being highly efficient. But a low number of branches and employees is not necessarily the same thing as an efficient banking sector if it means that the range of financial services is being rationed. It may be the case that the Swedish banking sector is stingy rather than efficient. The Swedish banking sector is in fact relatively small, in terms of assets in relation to GDP, but this is probably not explained by low lending, which is average, but by the fact that relatively speaking Sweden together with Finland has the lowest level of deposits among all EU15 countries. On the other hand, that is because in comparison with households in many other countries Swedish households make greater use of other forms of saving than bank accounts.
8/17  At the same time, there is also evidence that these developments have been accompanied by some degree of borrower selection for the supply of credit, so that access to funding has improved more markedly in the case of firms in a more favourable economic and financial situation. This has been reflected in an increase in the positive association between the receipt of loans by firms and their productivity. This period has also seen a significant improvement in credit institutions’ solvency ratios, with their tier 1 capital ratio rising from 7.5% in 2007 to 13.5% by the end of 2018. 9/17  Current situation and future challenges of the Spanish banking sector Despite all these improvements, the Spanish banking sector still faces significant challenges. The challenge to banks represented by the task of reducing troubled assets is now greater, because the troubled assets already sold were naturally the most attractive ones. It is thus crucial for banks not to relax their credit standards if they wish to minimise their new bad debts and maintain their active management of NPL and foreclosed asset portfolios. While net interest income has held steady, the decrease in unproductive assets and writeoffs has helped to improve profitability. Specifically, at the end of 2018 the return on equity stood at 7.2%, the highest since the global financial crisis and also above the European average. Despite this, the return on equity is still below the cost of capital, making low profitability one of the main risks facing Spanish and European banks.

However, analysis of Spanish bank capillarity shows that between 2007 and 2017 the increase in the proportion of the population without a bank branch nearby was 0.7%, as the closures were concentrated in areas of high branch density. Also, the emergence of new technologies allows bank services to be offered using more flexible and mobile methods. In any case, we should not forget that the average size of Spanish bank branches remains small, in comparison with other European countries. This drive to correct the excessive size of the Spanish banking system has been accompanied by significant restructuring. As you well know, the financial crisis led to considerable deterioration in the quality of Spanish banks’ assets. In fact, the excessive concentration of Spanish banks on the real estate sector and the intensity of the recession caused the non-performing loan (NPL) ratio to reach, within just five years, unprecedented levels of around 14% by the end of 2013. Moreover, as a consequence of defaults, banks foreclosed a considerable volume of real estate, which formed part of the collateral for many loans. In 2014, their foreclosed assets amounted to more than € billion. The lower return on assets, along with the increase in provisions for NPLs, when a large part of the general provisions built up during the preceding expansion had been used, caused the banking industry as a whole to post a loss in 2012.