samchain/econo-pairs-v1 huggingface dataset:
On this view, the slowdown in prospect would have relatively benign effects in terms of the longer term sustainability of the global economic expansion; and developments so far have already had positive effects both in terms of their impact on the world oil price, and in terms of their impact on the pattern of exchange rates, notably by reducing the exaggerated weakness of the euro. On that basis the global economic environment should provide a reasonable background for our own economy. We – and our partners in the European Union – would be relatively little affected by the US economic slowdown. The world economy as a whole would certainly be helped by the somewhat softer oil price. And the recovery of the euro – including its recovery against sterling – will help to ease the severe imbalance within our own economy between the domestically-orientated sectors which have typically been doing relatively well and those businesses and sectors that are most exposed to competition from the Eurozone and which have been having a rough time. That imbalance is, I know, a real concern to many up here in Yorkshire, including many of you here in Sheffield. It has, for some time, been one of the most difficult issues confronting us in conducting monetary policy. What then are the major domestic uncertainties?

But we are sensitive to the fact that certainly over the past two or three years price pressures in both product and labour markets have been less than we would have expected based on earlier experience, given the strength of demand. You might explain this in terms of more intense competition and lower margins in product markets; or in terms of an increase in the rate of productivity growth, perhaps related to the application of new technology, such as we have seen in the US; and you might explain the recent relatively benign real earnings growth in terms of the more flexible functioning of labour markets. But we cannot be sure of the explanation, nor of how large or persistent the relevant effects will prove to be. We are nevertheless sensitive to these possibilities; we do indeed try to allow for them in our forecasts and in our policy judgements, based upon careful scrutiny of all the latest information that we have. But the process remains necessarily judgmental, and that, of course, leaves us vulnerable to assertions that we don’t give sufficient weight to this or that factor. That, some of our critics maintain is why inflation has been below target for much of the past two years. In fact the undershoot has been marginal – given the uncertainties - and can just as well be explained by the unexpected strength of sterling’s effective exchange rate, reflecting the weakness of the euro, which has both directly dampened the price level and constrained external demand.
However, it is still possible to rationalise further and there is considerable scope, in my opinion and the opinions of many others, for reducing transaction costs further, particularly in cross-border securities trading. The technological developments also inspire hope of reducing the time between trade and settlement. A situation where settlement could be made as soon as possible after the deal would be very welcome. This is because it would limit the risks the various counterparties have against one another. Most financial instruments traded in Sweden today are settled three days after the trade. It should be possible to reduce this period now, so that settlement is made one day after the trade. This would increase efficiency and reduce the settlement risks. If I act as visionary a moment, I can see that in the not too distant future settlement could in principle be simultaneous with trade, so that no time lag arose at all. There still remain some practical obstacles before this becomes a reality. However, I have every hope that these obstacles will be overcome in time. Another, equally important aspect of the technological developments is that they have made it easier for new operators to enter the financial markets. This has led to stiffer competition, which has put further pressure on transaction costs. Technological developments affect competition in several ways. Improved information technology enables operators to offer customer more and cheaper services. The Internet has revolutionised both the spread of information and order systems.

Christian Noyer: Financial regulation-stability versus uniformity, a focus on non-bank actors Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements and President of the ACPR (Autorité de contrôle prudentiel et de resolution/French Prudential Supervisory Authority), at the ACPRBank of France Conference “Financial regulation-stability versus uniformity, a focus on non banks actors”, Paris, 28 September 2015. *  *  *  Ladies and Gentlemen, It is a great pleasure for me to introduce this Conference on a particularly topical issue: “Financial regulation-stability versus uniformity, a focus on non-banks actors”. The title of the conference invites all the participants to reflect on the puzzle policy makers are facing these days: –  on the one hand preventing regulatory arbitrage and ensuring a consistent approach to financial regulation between sectors  –  and on the other hand taking into account the idiosyncratic business models and risks of each actor or sector of the financial system. To explore further this question, I would like first to thank Professor Jean Tirole, the 2014 Nobel Memorial Prize in Economic Sciences who will deliver the keynote address today. I am also honored to welcome the distinguished speakers, academics, policy makers, industry representatives who agreed to share with us their views on how best to regulate non-banks actors. Other the past few years, the Banque de France has developed a close cooperation with Jean and his colleagues from the Toulouse School of economics.
Third, the Basel framework still focuses largely on the assets side of a bank’s balance sheet. Basel II excluded consideration of the liquidity and liability structure of the balance sheet, so much so that when the UK adopted Basel II in 2007, of all the major banks the one with the highest capital ratio was, believe it or not, Northern Rock. Within weeks of announcing that it intended to return excess capital to its shareholders, Northern Rock ran out of money. Basel II was based on a judgement that mortgages were the safest form of lending irrespective of how they were financed. If a business model is based around a particular funding model that suddenly becomes unviable, then the business model becomes unviable too, as events in 2007 showed. Whether the measures included in Basel III will be able to deal properly with the risks that result from inadequate levels of liquid assets and a risky structure of liabilities remains to be seen. One criticism of Basel III with which I have no truck is the length of the transition period. Banks have up to 2019 to adjust fully to the new requirements. Although some of the calculations of the alleged economic cost of higher capital requirements presented by the industry seem to me exaggerated (Institute of International Finance, 2010), I do believe that it is important in the present phase of de-leveraging not to exacerbate the challenge banks face in raising capital today.

A critical aspect of cybersecurity is the need for banks to adequately invest in safeguarding their systems and platforms by training their employees on how to identify potential cyber-attacks, mitigate vulnerabilities, and escalate issues appropriately. Moreover, to address potential insider threats, banks must establish and maintain robust protocols and controls in managing employees’ access to the firm’s systems and databases. Ensuring that sensitive firm data, personal information, and critical infrastructure are accessible only to those trusted employees who need access is vital to guard against accidental or intentional data loss, theft, or damage. 3/4  BIS central bankers' speeches  Supervisors expect that institutions create a strong risk culture around access control and vendor management. Employees are banks’ first lines of defense against cyber vulnerabilities, so investment in employee training is critical. By raising awareness about potential threats and vulnerabilities, a bank can equip employees with the knowledge and judgment to recognize attacks such as social engineering and mitigate the impact. In addition, training can reduce the probability that an employee will unintentionally cause a breach. For example, we have seen deficiencies due to weak internal controls and policies and procedures, which have led to increased exposure to cybersecurity risk. Institutions are expected to ensure service providers comply with applicable regulations that are consistent with safe and sound banking practices. Closing I’ve outlined three major, transformative changes and trends that all of us in this room— community bankers, regulators, and supervisors—are currently facing.
Investment banks whose customers were professional investors had a freer hand, but no safety net.8 Banking gradually became a growth industry in many countries. Strict regulations in one country prompt banks to flee to another. The result was the dilution or elimination of many regulations that attempted to rein in the imagination of the financial sector. The rationale behind the Glass-Steagall Act was discarded. This trend was universal. Unfettered financial markets were apparently a success. Mortgage-backed securities enabled more Americans to become homeowners, and a bullish stock market was good for pension funds – as long as it lasted.9  7  Debt levels among European countries were, on the whole, excessive in 2008, though this varied substantially from country to country. For example, Ireland and Spain had moderate sovereign debt, but both countries have later incurred additional obligations owing to the problems in their banking sectors. By 2008, the government debt of Italy and Greece had already exceeded 100 percent of GDP. 8  In the US, under the Glass-Steagall Act, which was passed in 1933, banks were no longer allowed to engage in retail banking (deposits, lending and payment services) while also engaging in more risky investment banking activities. When the act was formally repealed in 1999, it had long been the subject of intense discussion in the academic literature.

But the other side of this coin is also important: in years when economic conditions are favourable, when the private sector is at full speed, the government should hold back and put aside reserves to boost its financial strength so that it can provide support when the economy needs it.” Nicolai Rygg (1948), “I økonomisk stormvær” [In stormy economic weather], festschrift for Joh. H. Andresen, also published as an annex to the periodical Statsøkonomisk tidsskrift nr. 3/4 1948, p. 23. In this article, Rygg highlights his assertion that government budgets must balance over the business cycle. 15  Governments consistently overestimate growth in their forecasts (Frankel 2011). But this is difficult; in summer 2008, the average OECD country overestimated the budget situation in 2007 – the year prior to the forecast – in an amount equivalent to 2 percent of GDP (National Budget 2013). 16  In his 1933 pamphlet “Saving and Circulation Regulation”, Frisch proposed the establishment of an advisory committee on the business cycle, composed of economics experts. 6  BIS central bankers’ speeches  In retrospect, we can acknowledge that simple rules of thumb can often be useful. For my own part, many years’ experience of economic policy have led me to notice the prevalence of the figure 4.17 A current account deficit exceeding 4 percent of GDP is often a harbinger of future problems. Spain is a case in point: government finances were fairly healthy, but deficits were building up in the private sector.
When we now look back we must be self-critical and admit that we did not see the liquidity crisis that developed in the financial system in time. We did, however, issue repeated warnings about the development of risks in the Baltic countries and the fact that risk in general was priced too low on the financial markets. Unfortunately, our warnings in these cases were not sufficiently acted upon. Another lesson to be learned from the crisis is therefore that we – the authorities and perhaps also the financial participants – must be better at seeing the whole picture and understanding the systemic consequences of individual decisions and actions. The authorities must also be given the opportunity to act when an untenable build-up of systemic risk is observed. This may require new tools. This does not necessarily mean that the Riksbank should be in charge of these new tools. Instead, the close cooperation between various authorities needs to be constantly developed. In practice, “new” tools may mean applying “old” individually-oriented regulations more bluntly than previously. If, for example, the aim is to dampen mortgage lending, a blunter application of the regulations may mean that even banks that have been restrictive in their lending are affected by higher costs or stricter regulations, for instance because the authorities introduce higher capital requirements, amortisation requirements or regulations on loan-to-value. These new costs and restrictions will be motivated by systemic concerns rather than the need to safeguard the stability of an individual bank.

Post-September 11, Middle Eastern countries have started to look East to lessen their reliance on the West for management, science and technology, education, governance systems and developmental models. They are also increasingly aware of the dynamism of a rising Asia. Singapore began to take a focused interest on the Middle East three years ago. My overall impression is that the Middle East is at a tipping point. The region faces major political and security challenges like the Palestinian-Israeli conflict, situation in Iraq and Iranian nuclear issue. These are deeply complex and inter-connected issues, made even more complicated by a long history of distrust and religious conflict. We in Asia wish the Middle East well. We hope that the Middle Eastern countries can find ways to either resolve the issues or at least manage them in such a way as to avoid the region from tipping over. Despite the challenges, there are many positive developments to balance the negative challenges in the Middle East. Breathtaking physical transformation and impressive development are taking place  BIS Review 21/2007  1  there. High oil prices and sound policies underpin this strong economic performance. Within the region, the Gulf states are taking the lead to modernise and diversify their economies in as quick a time as possible. If these positive forces tip the region in the direction of peace, cooperation and development, the Middle East will, together with Asia, transform the world in this century. Asia's growth story is already well-known. China and India will be the lead players.
Lucas Papademos: ECB Financial Stability Review June 2006 Opening remarks by Mr Lucas Papademos, Vice President of the European Central Bank, at the press briefing on the occasion of the publication of the June 2006 ECB Financial Stability Review, Frankfurt am Main, 1 June 2006. The slides and charts for this speech can be found on the ECB website at www.ecb.int. *  *  *  Ladies and Gentlemen,  1. Introduction  Welcome to this press briefing on the occasion of the presentation of the June 2006 edition of the ECB’s Financial Stability Review. As usual, the financial stability assessment contained in the Review reflects the input of a significant number of experts, and it builds on both inter-departmental work within the ECB and very close collaboration with the ESCB Banking Supervision Committee. The report that has been made available to you follows the same overall structure as the previous Reviews which the ECB has been publishing semi-annually since December 2004. However, the scope of the analysis has been broadened to include dedicated sections on the euro area commercial property markets, credit risk transfer market issues and hedge funds. Specific themes of particular interest have been addressed in a total of 17 boxes. There are also three Special Feature articles, notably a discussion of macro-level stress testing practices across EU countries, an assessment of banking system risk using extreme value analysis, and an investigation of the driving forces behind EU banks’ stock returns.

Spain, France and Italy have experienced the most rapid growth rates, but in Germany further declines or only moderate increases in prices have been reported. An evaluation of the risks to euro area financial stability stemming from the household sector depends on the balance sheet situation of households as this determines their resilience to adverse financial shocks. Both the households’ debt-to-financial assets ratio and the debt-to-liquid financial assets ratio have continued to grow, but more moderately compared with the rapid increase at the beginning of the current millennium. Although this implies a further deterioration of households’ financial position, the household sector’s liquid assets still exceed its debts. 5. Euro area financial system  5.1. Euro area financial markets  Let me now briefly turn to the euro area stock and corporate bond markets, both of which continued to develop dynamically until very recently. The Review points out that despite the favourable economic outlook, a risk of a slowdown in market dynamics cannot be excluded if risk-free interest rates continue to edge upwards and credit ratings and/or earnings growth surprise to the downside. On the positive side, structural developments in euro money markets, described in Box 6 of the Review, and the increased use of collateral in borrowing and lending transactions, discussed in Box 7, suggest an overall strengthening of the financial system’s resilience to a systemic shock.
In Spain’s case, in a setting in which the state of alert affected the last two weeks of Q1, we witnessed the biggest-ever contraction in GDP historically in a single quarter, namely a quarter-on-quarter rate of 5.2%. This decline was one of the most pronounced in the euro area, and was in response to several circumstances. These included a relatively greater severity of the lockdown measures (given, too, the greater intensity of the pandemic) and the presence of certain structural factors in our economy that make it more vulnerable to a shock of these characteristics. The most significant factor here is perhaps the high weight of the tourism-related sectors, which have been particularly affected by the social distancing measures. The reduction in hours worked, estimated at 5% in Q1, was also the biggestever in the time series and highlights the marked impact of the various measures affecting movement on the labour market in the early stages of this crisis. Admittedly, the restrictions on movement were gradually eased as from early May. But the state of alert ran for much of Q2, whereby a notable increase in the decline in GDP and in employment in this period is to be expected. The latest Banco de España macroeconomic projections, published in June against a background of unusually high uncertainty, posted estimates of quarter-on-quarter declines in activity in a range between -16% and -21.8%. And the information since available tends to confirm that the decline in economic activity in Q2 as a whole will have been in this range.

No hard data on industry-wide uptake are available but intelligence from supervisors is that the scale of adoption of advanced analytics across the industry so far is relatively slow. There is clearly, however, the potential for usage to accelerate. At the macroeconomic level, changes in technology, including AI, could, over time, profoundly affect the nature of the financial services consumed and may result in changes to the structure of the financial services industry. This set of issues is being explored at the Bank of England by Huw Van Steenis in his review of the future of the financial system. What matters to  1  McWaters, J (2018) 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  us as prudential supervisors is the extent to which the development of advanced analytics changes the risks to the safety and soundness of the firms we supervise. Increasing levels of automation, machine learning and AI could improve the safety and soundness of firms in some ways. For example, until recently, most firms were using a rules-based approach to antimoney laundering monitoring. But this is changing and firms are introducing ML software that produces more accurate results, more efficiently2, by bringing together customer data with publicly available information on customers from the internet to detect anomalous flows of funds.3 ML may also improve the quality of credit risk assessments, particularly for high-volume retail lending, for which plenty of data are available and can be used for training machine learning models.
The return on real estate and infrastructure tends to follow a slightly different pattern than the return on equities and bonds. Investing in these asset classes is therefore expected to improve the GPFG’s risk-return trade-off. Looking ahead, the GPFG will likely reduce its allocation to bonds from today’s weight of 35 percent. For a long-term investor, this is a sensible adjustment. At the same time, it will signal that the authorities are willing to accept considerable fluctuations in the return and size of the GPFG, at least on a par with the volatility seen during the financial crisis. Even though a number of countries hold substantial foreign exchange reserves, Norway stands out. In almost no other country does the central bank manage such a large and diversified investment fund. The GPFG has delivered solid results, and its management model has been shown to be robust despite periods of rough weather. Transparency, accountability and the safety of capital invested are paramount. The organisation has been enlarged to manage a steadily growing and more diversified portfolio. Changes in the organisation of the GPFG may come. But whatever the future solution may be, the primary objective of investment management must remain firm: the highest possible return for the benefit of current and future generations. The GPFG should remain a financial investor. If the government were to use the GPFG for other purposes, it would limit the scope for achieving good returns and thereby Norway’s fiscal space.

12  BIS central bankers’ speeches  Central banks in new and uncharted territory Major shifts in export prices have not been alone in posing challenges to the Norwegian economy through history. Financial turbulence and banking crises created their own set of challenges. Central banks play a particular role in the event of financial turbulence. As the bankers’ bank, the central bank acts as lender of last resort. The first time Norges Bank undertook this role was during the Christiania Crash in 1899 – Norway’s first debt-driven real estate bubble. When the most recent financial crisis hit Norway in 2008, our role as lender of last resort was again put to the test. Access to short-term funding dried up. This also affected Norwegian banks. Norges Bank had to provide liquidity support, and the government implemented extraordinary measures to safeguard the financial system. For Norway, the real economy effects of the financial crisis were short-lived. Other countries have had a more difficult time. Since the financial crisis, monetary policy in many countries has been stretched close to the limit with the aim of putting economies back on their feet and keeping inflation above zero. Many countries are still experiencing weak growth. This is not unusual in the wake of a financial crisis. A post-crisis economic downturn may prove to be deep, and it may take a long time to reverse the negative trend. In a number of countries, little support from other policy areas has made the job particularly demanding.