samchain/econo-pairs-v1 huggingface dataset:
By early March last year, 40% had been wiped off the value of the FTSE companies; corporate bond spreads were at their widest since the 1970s; and banks continued to hoard liquidity, with spreads in the interbank market still around fifteen times higher than their pre-crisis levels. The financial crisis began in earnest in the summer of 2007, when the burgeoning sub-prime mortgage crisis began to pile pressure on banks. But it intensified dramatically following the failure of Lehman Brothers in September 2008, leading to the most severe banking crisis in living memory. The Monetary Policy Committee responded aggressively, cutting Bank Rate from 5% to 0.5% – its lowest ever level – in just five months. But the need for further monetary stimulus was clear. In principle, it would have been possible to cut Bank Rate a little further, to zero or even to a small negative number. But the structure of many traditional mortgage lenders’ balance sheets meant that lowering Bank Rate even further was likely to eat into their profitability and so intensify the credit crunch. Exactly what the monetary loosening was trying to avoid. Instead, the Bank decided to vary the size and composition of its balance sheet to inject money directly into the economy. And so QE was born. Since then the economy has stabilised, household and business confidence have recovered, and financial market conditions have improved.

There is a natural limit to what can be learnt from past time-series relationships. A standard portfolio model of OFC’s money demand, in which money holdings are jointly modelled with movements in asset prices and relative rates of return, would suggest that asset purchases on the scale seen might increase asset prices by the order of 20–30%. 4 At first blush, this impact may seem surprisingly large. But it is important to remember that the scale of the asset purchases made over the past year is truly substantial, amounting to some 14% of nominal GDP. But there are obviously huge uncertainty bands surrounding this type of estimate and I would not be surprised if it was revised, perhaps significantly, as we learn more about the impact of our current policy. These higher asset prices should help to stimulate increases in consumption and investment via wealth and cost-of-capital channels. But the transmission of the monetary stimulus through to higher nominal spending may occur only gradually. This suggests that a significant impact from our asset purchases is still to come through. An important issue when thinking about the likely channels of monetary transmission is the state of the banking system. In normal times, a key channel through which asset purchases might be expected to operate is by increasing banks’ stocks of liquid assets, which may encourage them to extend new loans. But we are not in normal times. Banks are pulling back on their lending as they seek to strengthen their balance sheets and reduce their leverage.
And international co-operation is essential in addressing risks and problems that do not fit neatly inside national borders, doubly true for insurers given the global nature of many of the risks you cover and global structure of many insurance companies. Just as ensuring robust prudential standards at UK level is an important aspect of UK competitiveness, robust prudential standards at international level will contribute towards global competition. Climate Change  Healthy competition can also help accelerate developments in new and little explored areas of risk. Understanding of climate change risk in the financial sector has expanded significantly over the last few years – and international collaboration is key to enable those organisations that are further ahead to encourage others to make similar, or perhaps even bigger, strides. I’m delighted to have been recently appointed as Chair of the Sustainable Insurance Forum (SIF). SIF serves as the platform for insurance supervisors and regulators looking to address sustainability issues, enabling collaboration, sharing of knowledge and identification of best practices. Coordination at the international level – through platforms like the SIF and also the Network for Greening the Financial System (NGFS) – enables the development of consistent standards that can be implemented globally. Just as importantly, collective action also reduces the risk of individual states undercutting on standards to gain a competitive edge – international consensus as a means of addressing collective action problems. I’m very pleased that the ABI has chosen to focus on climate risk as one of the themes of today’s event.

Having made a conservative estimate of the loss, it must be absorbed by the firm’s capital structure, respecting the ranking of priority that would apply in liquidation. So you start by writing off the equity to the extent that that is needed. If the loss is bigger than the equity, you also write off the subordinated debt. If there is still some loss left, then you write down the claims of uninsured, unsecured creditors in one way or another; the scope of this would need to be made clear in the statutory framework for resolutions. The loss is then covered. But it is still necessary to recapitalise to the bank, so you convert some of the residual claims of the unsecured, uninsured creditors into equity. How much? Whatever the microprudential regulatory authority concludes is needed to provide adequate capitalisation for the bank or dealer going forward. 2  BIS Review 144/2010  This is a technique that will work only in circumstances where the size of the loss could be estimated in the run up to the resolution and where the underlying franchise of the business remains basically viable. But it has the promise of being able to take an essentially viable business with a toxic part, write-off the toxic part and reconstruct the capital structure of the bank or dealer so as to be able to maintain the business as a going concern.
Before I turn to that subject, I should like to address, very briefly, two broad interconnected subjects: first, the theme of competition, particularly in the context of the current programme of banking sector reform; and secondly, the question of consumer protection, in the light of increasing competition and other trends. Competition and banking sector reform We are now two years into our programme of extensive banking sector reform. In fact, the first measure under that programme was my clarification, at your dinner in June 1999, of the HKMA’s policy on the question of Lender of Last Resort. It was a pretty heavy-going speech for an after-dinner occasion, and I still recall the drooping eyelids and stifled yawns. But at least those of you who sat through it can take satisfaction in the fact that you were witnessing a minor historical event. Since then, the reform programme has made a great deal of progress. In 1999 we relaxed the “one building” condition on foreign banks licensed since 1978. Last year we expanded access to Real Time Gross Settlement and implemented the first phase in the deregulation of the remaining Interest Rate Rules. We also completed a study and a public consultation on the case for establishing a commercial credit reference agency. Earlier this year, a similar public consultation was completed on the case for a deposit insurance scheme. The general view in these consultations was that the two schemes should be pursued, although we fully recognise that there are dissenting opinions on the question of deposit insurance.

This lack of transparency was present in a number of different places: •  Valuation. CDOs and other securitized obligations were complex and difficult to value. This reduced liquidity, pushed down prices and increased uncertainty about the solvency of institutions holding these assets. BIS Review 125/2009  3  •  Prices. The lack of pricing information led to a loss of confidence about accounting marks. Sometimes identical securities were valued differently at different financial institutions. •  Concentration of risk. Because there was no detailed reporting of exposures, market participants did not know much about the concentration of risk. This led to a reluctance to engage with counterparties, which, in turn, pushed up spreads and reduced liquidity further. Regulatory reform These four strands – understanding interconnectedness, mitigating pro-cyclical system dynamics, improving incentives and increasing transparency – should be critical areas of focus in our efforts to enhance the resiliency of the banking and financial system. We will do this through several channels, including international regulatory reform, enhanced capital requirements, the introduction of common liquidity standards and clear expectations for compensation practices. Today I am going to spend some time talking about how we might take account of these strands to ensure that our regulatory capital regime helps to facilitate a more robust and stable financial system. In my view, the regulatory capital framework would benefit from four changes: •  Improving the risk capture associated with the capital requirements.
While the outlook for the global economy remains firm, the persistently higher oil prices and some softness in the recent US data have shifted the balance of risks more to the downside. The key issue at this time is thus the oil prices, and the key question is how the higher oil prices will affect the global economy going forward. Ladies and Gentlemen, This year prices of oil have gone up by more than 40 percent. The Dubai price, which is the key reference price for Thailand, went up from last year’s average of $ 27 per barrel to now about $ 39 per barrel. Domestic retail oil prices, however, have gone up by less because of the price support scheme that the Government has been running. This has helped limit the immediate effects of the high global oil prices on the economy. But notwithstanding the subsidies, domestic inflation has been rising. Headline CPI inflation, for example, rose to 3.1 percent in July. At this time, we believe there is substantial price pressure building up in the economy that could eventually translate into higher consumer prices once the proft margin is adequately squeezed. This pent - up price pressure is linked not only to the higher global oil prices that have yet to be passed through to the consumer prices, but also to the continued high level of capacity utilization and to the reported tightening in some segments of the labour market.

Between now and the 15 November, the Bank will therefore be running a consultation programme that will provide the public with a greater familiarity with polymer banknotes. The consultation will, in turn, provide us with a better understanding of the public’s views on the proposed change and whether such a change would meet with broad public acceptance. BIS central bankers’ speeches  1  We will be holding around 50 events across the UK to enable the public to see and feel examples of polymer notes, and to deliver feedback to the Bank. We will hold events in 13 major shopping centres to allow shoppers to see and handle specimen notes. And we will be running over 30 discussion events with audiences including regional chambers of commerce and retailers. A market research company will separately be conducting another 36 focus groups and carrying out a face-to-face survey with 2,000 people to collect further feedback. We will also publish a range of useful material on our website including a facility for the public to provide feedback directly to us. And there will be a specific display about polymer in the Bank’s museum for anyone visiting London who wishes to learn more. In parallel with the public consultation we will conduct further outreach with the cash handling industry, to confirm our understanding of the impact on industry of a switch to polymer.
At this point, monetary policy must broaden its scrutiny to involve every important aspect from the external environment, domestic economic cycle as well as structural features important for the future monetary policy stance. The bottom line is that in a dynamic external environment we must take care about structural bottlenecks, regardless of whether they are related to the transitional stage of our economies or induced by the global crisis. I have tried to tackle some of them, which I believe will be discussed further on the high level Governors panel or additionally elaborated in the next sessions within the research papers. As I mentioned at the beginning, this is a broad topic, which is very important for the monetary policy transmission effectiveness. Therefore, I appreciate your attendance and contribution to our Conference, in sharing experiences and broadening our overall knowledge on these issues. I wish you interesting conference and fruitful discussion! 2  BIS central bankers’ speeches

The Bank of Russia sought to pursue a balanced policy in developing the banking sector. On the one hand, we helped banks adjust to the new conditions and eased banking regulation, on the other hand, we stuck to the policy of resolution of the banking system and countering fictitious transactions. Our key objective is to have a sustainable, capitalised financial system capable of funding the economic growth. In 2015, the banking system accumulated capital, household deposits recovered, and lending to the real sector grew slightly. In the first half of the year, the banking system suffered losses, but returned to profits by the year end. Profit stood at 192 billion rubles in 2015, and 234 billion rubles in the first five months of 2016. In 2016, we expect profit to be about 500 billion rubles. To develop the banking regulation, the Bank of Russia continued to introduce international standards, including Basel regulations, implemented compensatory measures to ease the adjustment of the banking system to the new environment, and introduced its own regulatory measures which take account of the specific risks of the Russian banking system. We continued to pursue a sequential policy of banking sector resolution. Unfortunately, the pace of licence revocation was high. Here we seek to occupy a more proactive position in  2  BIS central bankers’ speeches  supervision, and take early warning and preventive measures. For this purpose we improve our internal procedures. Thus, we decided to establish a risk assessment service.
Remittances have significant potential to deliver such opportunities to millions of migrants in their home countries. Let this Forum serve as a call to action, based on an honest search for better understanding and a genuine commitment to pursue individual and collective solutions. With much at stake, we cannot afford not to. Thank you. 5/5  BIS central bankers' speeches

As advanced economies drive global demand going forward, these sectors stand to benefit, as seen in the recent pickup in exports of automotive parts and printers to the U.S. There is much potential for movement to competitive sectors, as Thai labor is recognized for quality in complex manufacturing as well as delicateness in services. Leading global auto manufacturers for instance are committed to long-term investment in Thailand. At this stage, government can play an essential role in development of skills in the labor force. The alignment of hiring needs, education in relevant skills, and the right incentive structure is the most important requirement to unlock Thailand’s productivity limit. BIS central bankers’ speeches  3  Furthermore, policy consistency and transparency are necessary for businesses to be certain about their long-term investments. Misalignment of policies, both between agencies and across regimes, must be reduced while concrete long-term plans should be communicated to businesses on the regular basis. The current government is aware of the need for supply-side development policies, and is implementing policies to improve infrastructure, support SMEs, and increase research and development, and will recommend continuation of these policies to the next government for consistency. Ladies and Gentlemen, I mention these structural challenges as I have in my previous talks, as complex issues benefit from the sharing of ideas. However, let me now move to issues within the direct mandate of the Bank of Thailand. Although less often mentioned, the Bank of Thailand’s roles in lifting growth potential still exist. Two roles are worth mentioning.
24 The students were then given more information on the case study and asked to answer further questions with a confidence rating. He found that additional information did nothing to improve the accuracy of the students’ answers. It did, however, cause the confidence rating they attached to these answers to rise significantly. The addition of information and experience led students to become overprecise, to over-estimate their abilities, to over-state their performance. There is no shortage of casual evidence of such hubris or over-confidence biases. 90% of faculty at the University of Nebraska rate themselves as above-average teachers. 25 Over 90% of US students rate themselves as above-average drivers. 26 And over 80% of Frenchmen rate themselves to be above-average lovers. 27 Over-confidence biases have been widely studied in politics and management. There is a degree of Darwinian self-selection at work here. Over-confident individuals tend to outperform in tournaments. This means they are more likely to occupy positions of influence in the first place, whether Prime Minister or CEO, though not Chief Economist. 28 But the same factor that pushes these individuals to the summit may also push them over the edge. Over-confidence increases the risk of over-reach – for example, pursuing overambitious targets or undertaking over-complex company takeovers, generating an aboveaverage risk of systemic failure. That is why nemesis is often thought to follow hubris. What is true of those managing countries and companies appears to be no less true of those managing money.

Willem F Duisenberg: Hearing before the Committee on Economic and Monetary Affairs of the European Parliament  Introductory statement by Dr Willem F Duisenberg, President of the European Central Bank, Brussels, 23 November 2000. *  *  *  As usual, I shall report on recent monetary policy decisions taken by the ECB and on the reasoning underlying these decisions. In addition, I should like to inform you about the decision taken by the Governing Council of the ECB last week to publish staff economic projections for the euro area. Finally, I should like to say a few words about the progress report, which has been published by the ECB as part of its initiative to improve cross-border retail payment services in the euro area. 1. Economic and monetary developments  After the last hearing before this Committee on 12 September, the Governing Council of the ECB decided to increase the ECB’s main interest rates by 25 basis points on 5 October 2000. The decision was taken to ensure that upward pressures on consumer prices would not translate into more permanent tendencies. It was based on evidence from both pillars of the monetary policy strategy of the ECB, notably continued money growth above the reference value and upward pressure on consumer prices owing to oil price and exchange rate effects in an environment of robust economic growth. Let me comment in more detail on the Governing Council’s assessment of the current economic situation.
R. G. Rajan (2005): “Has Financial Development made the World Riskier?”, in The Greenspan Era: Lessons for the Future, Jackson Hole conference proceedings. R. G. Rajan (2006): “Monetary Policy and Incentives”, speech given at the Bank of Spain conference on Central Banks in the 21st Century, 8 June 2006. C. M. Reinhart and K. S. Rogoff (2009), “The Aftermath of Financial Crises”, American Economic Review, 99 (2), 466-472. Taylor (2009), “The Financial Crisis and the Policy Responses: An Empirical Analysis of What went Wrong”, NBER Working Paper No 14631. 4  BIS Review 147/2009

We can only imagine what would be the situation if we still had fifteen different currencies, with so many bilateral exchange rates potentially as volatile as other asset prices currently are. That single thought experiment is enough to show how much Europe benefits from having a single, truly global, currency. Two days ago, we took two very important decisions. First, in an unprecedented move concerted with all major central banks, we decreased our policy rate by 50 basis points. Then, in a separate deliberation, we further adjusted our liquidity provision framework. I will spare you the technicalities. Suffice it to say that, as a result, banks will have regular access, against collateral, to unlimited amount of liquidity at the policy rate i.e. 3.75%; this, at least until the end of January 2009. Let me briefly comment on those two decisions. First, on liquidity provision. Since the crisis broke out, central banks have tried and restore an orderly functioning of money markets. Even when modalities are different, there has been a convergence in objectives and frameworks. Central Banks have stepped up their supply of funds at longer maturities. Some have broadened the range of collateral accepted in their secured lending operations. They expanded the scope of eligible counterparties so as to ensure a wider dissemination of funds. Importantly, major central banks conducted coordinated actions to provide longer-term funds to address dollar funding needs of non-US banks, thereby ensuring an adequate distribution of liquidity across borders.