samchain/econo-pairs-v1 huggingface dataset:
Chart 13: Possible escalation ladder  The precise calibration of this approach will be developed in the coming months. But the aim would be to impose progressively tougher requirements over time, as data and emissions-reduction technology improve, and key policy deadlines draw nearer. Making this escalation process predictable should increase the credibility of our actions, and bring forward companies’ responses. Conclusions and call for feedback Let me conclude. Achieving net zero is a pressing global priority. It requires action from everyone, including central banks. We believe it is possible to adjust the composition of our Corporate Bond Purchase Scheme to support net zero without compromising the Scheme’s primary monetary policy purposes. Doing so lies clearly within the MPC’s revised remit, and can be justified by noting that current market prices do not yet fully reflect the inevitable increase in the shadow carbon price. In designing a framework to guide that adjustment, our primary goal is to improve firms’ incentives for delivering the adjustments necessary to hit net zero, not simply minimise the current carbon footprint of the CBPS. 18  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  18  To achieve that, we expect to combine: an ambitious portfolio-wide climate target; a scorecard-based tilting mechanism; selective climate-related eligibility restrictions; and an escalation ladder ending in potential divestment.

That requires putting in place effective regimes to deal with remaining gaps such as those I have set out: liquidity in resolution, treatment of smaller institutions, unlevelled playing fields in an incomplete Banking Union and appropriate policies for dealing with systemic crisis. Of course, the adoption of such an ambitious reform may require difficult political compromises. But in the current Covid-stricken economies and societies, European citizens deserve a more robust crisis management framework commensurate with the risks threatening us. A consistent and comprehensive bank failure management framework will require that we work together and that every effort be made to safeguard and reinforce financial stability within a framework of cooperation and coordination between authorities at the European and international level. Thank you. 3
There is a risk of confusing the market or of "tying up” both the discussion at the monetary policy meeting and the actual interest rate decision. As the need for signalling has also declined with the changes made in our communication, as I see it there is good reason to reconsider the forms for signalling. What conclusion do I reach then? Well, as I see it, it should normally be enough to give clear signals in connection with the seven monetary policy meetings held every year. Only in exceptional cases is there a need to signal prior to the monetary policy meetings. And this is the way it has functioned in practice in recent years. In the cases where we nevertheless choose to signal prior to a meeting, it should in my opinion be clear who is behind the message, for instance, the entire Executive Board. This method of working also guarantees the principle of following correct procedures and observable decision-making that in my opinion is required in our role as public authority. Let me point out that what I have said should not be interpreted as advocating a transition from an individualistic to a collegial committee, or “putting a lid on” internal differences of opinion. Of course the individual Executive Board members should continue to be able to express their own opinions publicly. But as I see it, this should be more a question of afterwards clarifying and explaining personal deliberations made in connection with the monetary policy meetings.

One example is when the Japanese central bank committed itself during a deflation crisis to keeping the policy rate at a low level during a certain period. For another example, see the press release from the Federal Reserve Board of Governors on 12 August 2003. 4  BIS Review 40/2007  levels we foresee two years ahead. And the focus should be on not only current interest rates, but also expectations of future interest rate changes 6 . …to market expectations… We left most of these problems behind us when we changed over in October 2005 to making forecasts based on market expectations of the future development of the policy rate. Compared with the assumption of an unchanged repo rate, market expectations normally provide a much more realistic forecast. This was one thing that made it easier to evaluate us. However, an assumption that the policy rate will develop in accordance with expectations in the financial markets has its disadvantages. This perhaps applies above all to the difficulties in communicating the interest rate path when market agents’ assessments differ substantially from those of the Riksbank. Another problem that could lead to a lack of clarity in communication is how market expectations of the development of the policy rate should actually be measured. It may be difficult to estimate and adjust for different premiums – the compensation for differences between securities with regard to the maturity, credit risk and degree of liquidity required by an investor. There are also different ways of doing it.
But, as the global pool of non-bank assets has grown, the US share has declined while the share of emerging economies, most notably China has increased. (Chart 1) The growth of market-based finance since the crisis does not, as some have claimed, represent the movement of toxic risks out of the regulated banking sector into less regulated areas. Indeed the opposite, if anything is true, in that we have seen a movement within market-based finance away from the more dangerous forms of ‘shadow banking’ – away from the types of activities that were at the centre of the financial crisis and that amplified and transmitted stress to other parts of the financial system. 2  Much of this shift is the result of the post crisis regulatory reforms. As the Financial Stability Board (FSB) noted in its report to the G20 this year, ‘a series of measures are eliminating toxic forms of shadow banking and transforming the remaining into resilient market-based finance’. 3  In a nutshell, market-based finance has become a bigger part of the global system, more broad based regionally and less engaged in the riskier aspects of shadow banking. From a financial stability perspective, that is generally a good thing. There are a number of aspects of the growth in market-based finance that reduce financial stability risks. Most obviously there is the benefit of diversification. A strong, market-based channel of financial intermediation in the economy avoids over-reliance on the banking system and creates resilience.

10  For example, foreign currency debt securities were at the heart of the Latin American debt crisis in the 1980s in which bond investors played a significant role in volatile capital flows and ultimately in sovereign crises. 11 Recent Bank research shows that during the 2013 ‘taper tantrum’ asset managers sold bonds as prices fell, perhaps exacerbating the episode. See Czech and Roberts-Sklar (2017). 12 Whilst price-based measures of liquidity in fixed-income markets, such as quoted bid-ask spreads, are in line with historical standards, volume-based measure have deteriorated. In US and UK government bond markets, turnover ratios have declined materially since pre-crisis. In corporate bond markets, average large trade sizes have fallen. US corporate bond dealer inventories are over six times less than before the pre-crisis period and Sterling and US corporate bond inventories have been steadily declining since 2011. 13 Bank of England Financial Stability Report, Box 2, December 2015 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  It is also less clear now that other investors like pension funds and insurance companies would come in to stabilise a falling market in the way that they may have done in the past. A Bank of England-led study in 2014 found evidence that in some instances, insurance companies and pension funds might indeed act pro rather than counter-cyclically in a severe episode of stress, selling into a falling market.
With default rates in downturns on credit card and personal loans some seventeen times higher than on mortgages, this can be risky for the lenders. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  What lies beneath is of greater note. Because underneath that calm surface, a sharp slowing in credit demand from buy-to-let investors after a set of tax changes, and subdued credit demand from new buyers as incomes have been squeezed, has masked the effect of looser credit supply to owner occupiers. Mortgage rates have fallen materially relative to Bank Rate, especially at the riskier end of the lending spectrum (see chart 2). And lenders are now prepared to take a bit more risk. Mortgage loan to income ratios are rising. Households with high mortgage debt make cutbacks in downturns to keep paying the mortgage. More of 7  these households in an economy typically means deeper recessions (see chart 3). That’s why, when it comes to mortgages, the interests of the real economy can be served by guarding against excessive risk taking by lenders. We put in such guards, as insurance, back in 2014. They’re centred on a limit on new mortgage lending at more than 4.5 times the borrower’s income and on testing of the affordability of a mortgage to a borrower even if mortgage rates were in the region of 7%. 8  With lenders now prepared to take more risks, those guards are now working. Loan-to-income ratios have increased and are now hitting up against them.

Some CCPs are systemically relevant for multiple jurisdictions in view of the direct and indirect clients they serve worldwide and their interconnectedness with systemically important global banks. We have seen progress in making global CCPs safer and more resilient, starting with the safeguards introduced to address the shortcomings that the global financial crisis revealed. Today, clearing risks are much lower than they were ten years ago. And the robustness that CCPs have displayed since the outbreak of the pandemic shows that regulatory efforts are paying off. We should, however, continue to strengthen the resilience of CCPs. Last March we saw spikes in volatility and trading activity, coupled with a surge in liquidity and credit risk at the global level. Such situations call for closer cross-border regulatory, supervisory and oversight cooperation between CCPs, banks and public authorities. To prevent market fragmentation and preserve financial stability, both domestically and internationally, in the face of such adverse shocks, CCPs must meet the highest standards of financial and operational risk management. And an enhanced dialogue is necessary between CCPs, clearing banks and clients to ensure that, while managing their risks prudently, they each consider the impact that their actions may have on others and on the entire financial system. Central clearing is critical for sharing and managing risks effectively, and thus for supporting economic growth. Euro-denominated central clearing must not be a source of instability in the euro area or hamper the transmission of monetary policy.
Anita Angelovska Bezhoska: Covid-19 and economic influence on women Address by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the International conference “Women in foreign policy”, panel “Covid-19 and economic influence on women”, Skopje, 15 September 2021. * * * Accompanying presentation: bis.org/review/r211208k_presentation.pdf Minister Shahpaska, Deputy Minister Isaki, Ladies and gentlemen, First, let me thank the organizers for inviting me to participate in this very important event, devoted to a topic relevant for our context in particular. I was asked to speak on COVID-19 and the implications this health and economic crisis had on women. Last year, as we all know, we faced one of the biggest crises since the Great Depression. It started as a health crisis but over time it evolved into economic crisis that in a synchronized way affected all economies in the world and only 27 countries in the world registered positive yet very small growth rates. According to the estimates of the IMF, the economic costs of the crisis would have been 3 times higher and stronger in the absence of the monetary, fiscal and financial sector supportive policies. One of the main features of this crisis, which distinguishes it from other crisis episodes, is its disproportionality. In fact, this crisis in a disproportionate way affected different economies, sectors, and age and gender groups, thus increasing income inequality.

Let me finish by saying that this crisis underlined the need for policy makers to have a holistic approach to tackle all the sources of gender disparities which are entrenched in the institutional, regulatory, educational and even traditional setting norms. Thus focus on overcoming the crisis, which is definitely a burning issue for all of us, should not be a reason to sideline the fight for gender equality. On the contrary, it should reinforce it. Thank you. 3/3  BIS central bankers' speeches
In the first place, our judgments about the pass through of the exchange rate depreciation could prove to be wrong. Second, we are vulnerable to further upward shocks to commodity prices if, for example, Asian growth remains robust, although I draw a degree of comfort from OPEC’s excess capacity at present. Third, we cannot rule out that there has been a greater destruction of supply capacity than suggested by survey evidence, in which case underlying disinflationary pressures would be weaker than thought. And fourth, it is possible that, given still-tight credit conditions and an uncertain outlook for demand, some firms will take opportunities to raise prices in order to buttress cash flows, notwithstanding their operating within their potential capacity. As ever, we must therefore interrogate the data and surveys, and we must be especially sensitive to medium term inflation expectations (Chart 10). So far they have remained broadly consistent with the target. Judging from options prices, financial market participants seem to think that there has been a rising probability that inflation will overshoot substantially on the upside. But there seems to be a perception of a roughly similar probability of an overshoot on the downside (Charts 11a and 11b). The big picture is that the risks on both sides are tangible. The upside risk no doubt owes something to perceptions of the scale (and manner) of our monetary stimulus. I must therefore underline that there is no dilution in our commitment to the inflation target.

There is a great deal of slack in the economy. Around three-quarters of a million jobs (net) have been lost. And most surveys have firms working well within capacity (Chart 8). The MPC believes that that will tend to bear down on wages and consumer price inflation over the next few years, warranting our substantial monetary stimulus. But the recession will obviously impair the economy’s productive potential. Investment plans have been shelved and some discouraged people are likely to leave the workforce. Those effects are likely to accumulate over time. But there are important temporary factors too. Typically when monetary policymakers talk about the potential supply of the economy, we have in mind the slow-moving accretion in productive capacity determined by growth in underlying productivity, the workforce and firms’ net investment in the capital stock. Right now, that mindset would not quite capture what is going on. There are a number of reasons for thinking that the “effective supply” capacity of the economy has been depleted temporarily due to the shock to credit supply and confidence (Chart 9). How much, and how temporary, are major uncertainties. In the months immediately after the Lehman crisis, the cutbacks in lending and in trade credit insurance were so severe that some firms were probably unable to maintain production at previous levels. Working capital is, after all, an intermediate input. 2 Those constraints have probably reduced over the months.
Jean-Pierre Roth: SNB commemorative publication “The Swiss National Bank 1907-2007” Remarks by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the launch of the commemorative publication “The Swiss National Bank 1907–2007”, Zurich, 21 June 2007. *  *  *  Ladies and Gentlemen It is with pleasure and some pride that I present our commemorative publication today or – as the German language puts it so well – our festschrift, or celebratory work. There is indeed good reason to celebrate. One hundred years of doing business, crowned for the most part with success, certainly warrants celebration. The publication of a festschrift is one of the events being held to mark this anniversary. It is the fourth such work to be published, following on from those of 1932, 1957 and 1982. It is somewhat different, however, insofar as it commemorates an entire century of the National Bank’s existence. We wanted this commemorative publication to be a learned work, which at the same time is accessible to a very broad readership. We wanted it to be both unpretentious and modern, yet in keeping with the tradition of the previous works. I make no secret of the fact that significant resources were deployed to prepare the book. Work first started over three years ago and some fifty or so bank employees were involved in the project.

Commercial banks operating in the eurozone are willing to borrow around 250 billions Euro from the European Central Bank paying the key policy rate and at the end of the same day to deposit the same money at the European Central Bank being paid the discount rate, which is 1 percentage point less, but the spread between the short-term money market rates and the key policy rate still persists. Magnitude of the commercial banks’ position compared with the European Central Bank shows how huge the uncertainty has been. Only restoration of confidence about solvency and financial stability among commercial banks can most probably solve this problem. The third frontier we are concerned about is connected to the emergency liquidity assistance. Under standard circumstances central banks provide liquidity to commercial banks only. In case of an urgent need a commercial bank may ask the central bank for an emergency credit. What we see in the United States today is an attempt to extend this emergency assistance beyond the banking system and provide liquidity against collateral to non-banking firms. On one hand, one understands the effort of the Federal Reserve to provide funding also to the non-banking sector of the economy when the traditional channels are freezing. On the other hand, the Federal Reserve is effectively printing money against collateral with uncertain value and there are concerns when and how the Federal Reserve will close and null these operations to avoid potential inflationary consequences.
The vulnerabilities are more visible, when financial and NIIPs are observed, with several countries having moderately weaker positions. This indicates necessity for further policy changes, or bold structural reforms to improve the productivity and correct for the imbalances on the external front. The focus must be even stronger, given the subdued global outlook and rising risks on global trade and GVCs. Most of these countries are small and open, included in GVCs as well, indicating rising risks and need for policies to reduces vulnerabilities, and prevent adverse spillovers. 14  Table 1 External sector assessment – latest Article IV reports Current accunt possition  REER possition NIIP position  Financial flows  Albania Bulgaria Bosnia and Herzegovina Croatia Czech Republic Hungary Montenegro North Macedonia Poland Romania Serbia Slovenia Moderately  Substantially  Stronger Broadly in line Weaker Source: IMF, latest Article IV  Conclusion The snapshot of the global external profile reveals narrowing of the imbalances after the global crisis, and concentration of the imbalances in the advanced economies. Despite the lower magnitude, close to half of the current account imbalance does not seem to be aligned with the fundamentals and desirable policies. Furthermore, lower flow gaps, visible through lower current account and financial flows, were not sufficient to curb stock imbalances visible through the historically highest global NIIP. As far as CESEE the region is concerned, a simple analysis of the  external sector profile reveals compression of the current account gaps, slowdown in financial flows, and adjustment of the IIP position.

Of course, I am now going to go on to talk about risks, but before I do let me say that this sort of performance doesn’t happen by accident. But it does show that there is a role for mutuals and one that can succeed. Of course, a lot of hard work goes into achieving these results. On our side, I can also say that Martin Stewart and his colleagues put a lot of hard work into our role, which is founded on sensible forward-looking judgement consistent with our objectives in statute. So, what can go wrong – the risks? The first area that I would highlight is the potential for margin pressure. Most forecasters see continued growth in the mortgage market as the most likely development, but at a lesser pace than in recent years, which is consistent with actions taken by the Bank of England last summer to limit the growth of borrowing by highly indebted households. Competition in the mortgage market is growing, and for instance rates on two year fixed rate mortgages are at a record low. On the liability side, wholesale funding costs are low, and on much of the evidence they are below retail funding costs on average, and that tends to benefit lenders with greater access to wholesale funding. Therefore,  BIS central bankers’ speeches  1  notwithstanding the news on interest margins over the last two years, we are watching this story carefully to see what happens next.