samchain/econo-pairs-v1 huggingface dataset:
The Covid-19 pandemic and economic crisis has, in a way, helped to focus our minds on these two issues. There is a growing consciousness across the world that if we do not act now and act decisively, we will put our future at grave risk. This crisis presents us an opportunity to create a more inclusive society and a more sustainable planet. Finance, Technology, and FinTech can be powerful enablers in this endeavour. Everything we do in Finance, Technology, and FinTech must have a larger purpose. What greater purpose can there be than making our societies more inclusive and our planet more sustainable? 10 / 10  BIS central bankers' speeches

In the wake of the financial crisis, the arsenal of macroprudential tools has expanded significantly. Apart from the countercyclical capital buffer we have the systemic risk buffer, the buffers for globally and domestically systemic banks, the possibility to limit large exposures, increase capital or revise risk-weighted assets to residential and commercial real estate exposures. This is a significant improvement that will allow us to develop macroprudential policies that interact with microprudential ones as well as with monetary policy. But it is not enough to create macroprudential tools. They must be properly allocated institutionally in order to avoid inaction bias by policy-makers and counteract misalignment of incentives with the financial sector, in particular at certain points in the lending/financial cycle where taming is needed. In a sense, the dilemmas and incentives that policy-makers will face regarding macroprudential policy decisions will not be far different from those encountered in the past when setting monetary policy (i.e. interest rates). For the latter, the optimal institutional design is to enshrine monetary policy in an independent central bank. For the former, a very similar solution, intuitively, should prevail, although the theoretical framework and the empirical research to support it is much less advanced than in the monetary field. Needless to say, macroprudential policy is particularly relevant for a country like Spain, part of a monetary and banking union where, as seen in the past, the financial and business cycles of the member countries may be in different positions.
In such decision-making situations it may be appropriate to implement measures that can reduce the uncertainty and stave off particularly adverse outcomes for the economy. This now implies a more active monetary policy than normal, both in interest rate setting and through liquidity policy measures. When setting the key policy rate, we must also take account of developments in premiums in money market rates, other bank funding costs and bank deposit and lending rates. Weight has been given to moving forward the reduction in the key policy rate so that lending rates for households and firms can gradually be reduced. Norwegian banks, households and some businesses have increased their borrowings considerably in recent years. It is important that the necessary deleveraging does not take place too abruptly. Lower interest rates, combined with liquidity measures, may curb the impact of the financial crisis on output and inflation. At the monetary policy meeting on 29 October, Norges Bank’s Executive Board decided to reduce the key policy rate by 0.50 percentage point to 4.75 per cent. The Executive Board's assessment was that the key policy rate may lie in the interval 4-5 per cent in the period to the publication of the next Monetary Policy Report in March 2009, unless the Norwegian economy is exposed to new major shocks. Thank you for your attention!

On 17 September, American International Group (AIG), the largest US insurance company, had to rely on an emergency loan from the Federal Reserve. The company played a key role in the credit default insurance market. The financial crisis has heightened in several European countries. Banks in Belgium, Denmark, France, the Netherlands, the UK, Sweden and Germany have been taken over by the government or other financial institutions. In Iceland, the authorities took over the three largest banks and are now unwinding their international operations. The crisis at these banks prompted a flight from Iceland’s national currency which, combined with a property market crash, has triggered a sharp recession. In Norway, the effects of the financial crisis have also occurred more rapidly and become more pronounced than the outlook seemed to imply only recently. Norway is still in a better position than most countries. Capacity utilisation in the Norwegian economy has been very high. The surplus on current account is considerable and government finances are solid. Norwegian banks have limited exposures to international securities. They have suffered only small losses and recorded solid earnings in recent years. Furthermore, the Norwegian banking system is not large relative to the size of the Norwegian economy. In response to the uncertain environment, banks abroad and at home are reluctant to lend to each other and are tightening their credit standards. Credit channels are drying up. Money market rates have increased markedly, and to levels substantially higher than central bank key rates.
Demanding capital thresholds have been set for this component of the exhaustive analysis. Specifically, the reference value has been set at 8% in respect of top-quality capital (CET1) under the definition of the Capital Requirements Directive and Regulation that incorporate the Basel III Accord into European legislation. This 8% threshold is equivalent to adding, to the regulatory minimum of 4.5%, the capital conservation buffer of 2.5% and an additional  2  BIS central bankers’ speeches  1% to reflect the systemic importance of the significant institutions that will be overseen by the single supervisory mechanism. Finally, strict governance arrangements have been set for conducting the analysis, so as to provide for the consistency of the work performed by the national authorities in each jurisdiction. In this way, although the exercise will be carried out in a decentralised fashion, a significant central structure – with the involvement of external advisers – has been set up to ensure the maximum possible degree of uniformity. Evidently, it is a complex exercise posing numerous organisational challenges, and which must be performed with the utmost rigour to meet the objectives set and, above all, to ensure the comparability of the results obtained for each bank in each jurisdiction.

Moreover, with low inflation expectations, the private sector may postpone expenditures, thereby weakening economic activity. In fact, inflation is now below target in most advanced economies. As a result central bankers are asking themselves whether this decline is caused by common shocks, by a coincidence of domestic factors or by structural changes in the reaction of prices to the output gap. While recent price developments in the US and in the UK are largely explained by global disinflationary forces, oil prices, currency appreciation and the sensitivity of inflation to unemployment in a context of ongoing economic recovery,1 my overall assessment regarding the euro area situation is that a sizeable domestic component is at play. This has motivated the bold steps taken by the Eurosystem to counteract the risk of inflation remaining too low for too long a period of time. Part A – What happened to Euro-area inflation Let me now describe recent price developments in the euro area in more detail. HICP inflation has fallen consistently below our target since January 2013, declining from 2% to −0.1% in March 2015. Forecasters have repeatedly been surprised by this evolution. Three main reasons have been put forward to explain this. A first explanation is that forecasting has been complicated by the fall in global crude oil prices and raw materials and its transmission to other sectors. In this regard, recent research conducted at the Banque de France supports this view by showing that forecast errors for oil prices explain about half of the errors for headline inflation.
If we see clear signs that inflationary pressures are weaker than expected, we must continue to show through our actions that we take the inflation target seriously, by making monetary policy even more expansionary. Personally, I would be prepared to cut the repo rate even further, even if we were in the midst of an economic upturn. Is a monetary policy that takes indebtedness into account compatible with an inflation target? What conclusions can one draw from the Swedish case of monetary policy that takes into account indebtedness and housing prices? I would claim that the experiences so far argue against this type of monetary policy strategy. Inflation has been remarkably low and has moved further away from the target in a situation where the economy nevertheless appears to be in an upturn. Although there have been positive developments on the labour market, unemployment has remained around 8 per cent for a long time. Household debts have grown at around the same rate as disposable incomes, which mean that the debt ratio and the potential risks it entails are in principle unchanged. For me, it would appear as though the benefits have been small, while the costs have been high. However, it is of course difficult to draw any far-reaching conclusions on the basis of what we have been able to observe so far. We quite simply do not know how the Swedish economy would have developed if the Riksbank had conducted a more expansionary monetary policy.

What surprised us more on the negative side was the slow transmission of easier financial conditions on current and future inflation. 2  BIS central bankers’ speeches  So what have you learned so far? Our own experience with a negative deposit rate was more favourable than we initially thought. We then went to minus 0.20. Since then we also have the experience of smaller countries which cut the rates to even more negative levels. We also reopened the discussion on the zero lower bound. There is no decision which has been taken but it is true that, given the experience that we have seen, we thought in the Governing Council that there was the case to re-discuss the lower bound. Have you looked at what other central banks have done? Yes but one needs to be very careful when looking at the experience of other countries. Each central bank works in a different environment, what you see in a small open economy is not necessarily applicable in a larger zone. Could the euro area tolerate minus 0.75 percent, like, for example Switzerland? In terms of level, I wouldn’t have any judgement in terms of ‘they can do it so we can do it’, that would be too simplistic. You have to look at the specificities of each one. What’s your thinking on how to avoid the so-called ‘Cliff Effect’ if QE were to come to a sudden end? We are very well aware of that.
This thinking has been applied to the financial system showing that a priori identical shocks can have differing effects depending on where the shock hits. And, inspired by the literature on sand piles, Scheinkman and Woodford’s (1994) model of inventory dynamics shows how small shocks may cause aggregate fluctuations. 2  BIS Review 36/2010  different states of the system, depending on its history. 3 Many economic systems also exhibit forms of hysteresis or path dependence. For example, changing social attitudes towards personal bankruptcy, inflation or unemployment may affect equilibrium outcomes for those variables. 3. Policy responses to unpredictability  Predicting the precise timing and dynamics of instability in all of these settings is very difficult. It is, however, possible to identify a sand pile or forest as being prone to large scale instability and determine the factors that contribute to that instability. Analogously, many people, including at the Bank of England, did identify the vulnerabilities of the financial system before the crisis without actually being able to predict when or how the crisis would begin. Economists have been able to learn from other disciplines about how to cope with these types of instability. For example, insights from ecology and epidemiology have been applied to financial networks (for more discussion, see Haldane 2009), and economists have learned much from engineers about how to control dynamic systems. The key is for policymakers to focus on making the structure of the underlying system more robust to shocks.

The reports issued by the Counterparty Risk Management Policy Groups I and II both make the important observation that the financial system is likely to be more resilient under conditions of stress when counterparties set initial margins at levels that are likely to be sustainable in less benign conditions. When margin levels are set more conservatively, firms are likely to have more flexibility in responding to stress and are less likely to take action that might amplify the market shock and exacerbate the reduction in liquidity. When competitive pressure drives margins down, markets may be less resilient. Third, we believe the major financial institutions need to continue to improve their capacity to measure their exposure to risk in a less benign market and economic environment than we have experienced in recent years. The discipline of stress testing and scenario analysis that is designed to measure tail risk is at the frontier of this challenge. Senior management and the boards of directors need to understand the limitations of the tools we use to assess these risks, to try to better understand the potential scale of losses the firm may face, and to carefully examine how well risk exposures reflect the overall risk appetite of the firm, and the size of the capital and liquidity cushion maintained in relation to those exposures. BIS Review 54/2006  3  I want to conclude with the observation that the requirements of effective risk management and control regimes are likely to become more rather than less demanding over time.
Effects from climate change are examples of phenomena that have an impact in both the short and the long term, which can be a challenge for monetary policy. Today, I would like to show three examples of how climate-related risks might lead to monetary policy needing to become more or less expansionary and at the same time involve difficult monetary policy considerations:    6  A temporary supply shock A slow structural change  See Weitzman (2009a, b). 5 [18]    A severe economic crisis  It is important to point out, however, that there are many other non-climate-related events that could trigger similar scenarios. Before I go on, I would also like to say that the potential measures I refer to in different scenarios can obviously not be seen as a promise to use them in the event of a shock or a crisis, as every situation will be unique and the circumstances will vary. A temporary supply shock First, imagine a scenario in which a period of extreme weather, for example an unusually warm winter after an uncommonly rainy and windy autumn, leads to falling energy prices. This is the situation in which we currently find ourselves. It is also a situation expected to be increasingly common in Sweden in the years ahead due to climate change.

A minimum requirement for central banks is that they don’t contribute themselves to exacerbating global warming. Instead, it is reasonable to expect that the activities of central banks are gradually adapted in line with international treaties such as the Paris Agreement.20 Second, central banks  14  This section is based on Olovsson (2020). See also Buchanan (1965), Böhringer et al. (2012) and Nordhaus (2015), who also advocate carbon tariffs. 16 An advantage of carbon taxes is their relative simplicity. If set at an appropriate level, the tax will cause individuals and companies to consider or internalise the cost of additional carbon emissions when they take economic decisions. Emission trading is the measure that has so far been implemented on a global level to reduce carbon emissions. It is currently applied within the EU’s Emissions Trading System. The basic idea is to limit total emissions by auctioning off emission rights to companies and other players. These rights can then be bought and sold by various market participants. It is important that measures to reduce carbon emissions are introduced at the global level. Otherwise, ambitious measures in one region only risk leading to companies moving production to other less ambitious regions and thus no effect on emissions materialising. One way of reducing this risk is to introduce carbon tariffs on imported goods. 17 In the early-1990s, Sweden introduced a carbon tax that has formed the basis of Swedish climate policy.
It is of course possible that some of the technologies developed in the crypto world might be useful in the development of a digital pound, but as I will explain later, there is a large range of technologies that are now under consideration. Why is a digital pound likely to be needed? There are a number of considerations behind our assessment that a digital pound is likely to be needed. The assessment is forward looking. It turns first on current trends in the way we use money to make payments and the potential of emerging digital technologies and second on the public policy response necessary to ensure innovation and competition can flourish without jeopardising the safety and uniformity of the money we use in the UK. Money is at its root a social convention[1] based on trust that allows us to store, transfer and settle obligations we hold on each other in society. It’s safe and efficient operation is, as history has demonstrated, fundamental to social and economic stability. The forms that money takes and the ways it is used have changed throughout history driven by changes in technology and the changing demands of ever more sophisticated and complex economies. However, trust in money is the bedrock on which that innovation is built. Two forms of money are currently available to the public[2] throughout the UK. The Bank of England and the Royal Mint issue a physical form of money to the public – bank notes and coins, otherwise known as ‘cash’.

Bank of England reserves) and, crucially, by requiring all private money to be exchangeable for Bank of England money, cash, on demand by the holder and without loss of value. Alongside regulation, the provision of Bank of England money to the public and reserve money to commercial banks institutions anchors the confidence, uniformity and interchangeability of money in the UK. Our assessment is that future developments in payments and money will make it likely that, alongside regulation, we will in future need a digital pound, issued by the Bank of England to perform this anchor function. The experience of digitalisation is that new products and services, enabled by new technology, can be adopted rapidly at scale. The Government has identified several characteristics of digital markets that may lead to concentration. Such characteristics include network effects, economies of scale and scope and data advantages, which can act as barriers to entry. This suggests that the future development of private money issuance could tend towards a small number of firms taking a significant market share. While concentration and market power are not inherently harmful and may reflect innovative products and services, they can damage consumer choice, competition and innovation. Dominant issuers of new forms of private digital money may create ‘walled gardens’ - payment systems that are not fully interoperable or restrict the development by smaller firms of payment services using the money they issue.
It is part of the functioning of our internal democracy and of our decentralised political system. We firmly believe in the benefits of tax competition, which manages to keep tax rates relatively low. We regret that at the international level, any mention of “tax competition” is almost always preceded by the term “harmful”. This clearly reveals preconceptions and a biased judgement. BIS Review 13/2002  5  d)  Financial privacy  With tax harmonisation, banking secrecy is once more at the centre of the discussion. Allow me to add a few words on this subject. Earlier on, I did not mention banking secrecy - or perhaps should we call it financial privacy - as one of the necessary features of a successful financial centre, because I believe that, per se, it is not. What is important, though, as I emphasised earlier, is trust and professionalism. Banking secrecy is the prohibition for bankers and their staff to divulge any privileged information regarding their clients or third parties. The beneficiary of banking secrecy is the client, not the bank. Financial privacy is part of the Swiss legal structure. In my country, like here, individual freedom and protection of the private sphere are highly valued and deeply respected. In Switzerland, privacy rules are not limited to the banking sector, but they apply with equal vigour to professions such as doctors, lawyers, solicitors and the clergy. The respect of one’s private sphere has a long tradition.

What has been true for Nestlé, Novartis or Swatch - to name just a few - is also valid for the banks: in today’s competitive marketplace, only the fittest will survive, some of them even becoming global players in the process. b)  Professional skills  Secondly, our finance industry has access to a pool of well-educated, highly-skilled, multilingual, and service-oriented workers who are very familiar with international financial markets. Private banking has a long tradition in Switzerland, and financial advisory services to foreign clients have been a part of the Swiss banking business for generations, literally. c)  Efficient financial infrastructure  Thirdly, besides the availability of a highly professional staff, there is the outstanding efficiency of Switzerland’s financial infrastructure. I am referring here to the so-called “Swiss value chain” which comprises a full set of settlement and payment systems, with their individual parts harmonised in an optimum way. The entire facility consists of a trading platform, a payment-against-delivery system, and a central payment system. A fourth component, a central counterparty, is currently being developed. It might be due to their long tradition of watchmaking that the Swiss have developed a skill to build and interconnect sophisticated settlements systems. In 1987, the Swiss National Bank launched the Swiss Interbank Clearing (SIC), the first RTGS system and precursor of many payment systems around the globe. Shortly after, the Swiss Exchange moved from a traditional “à la criée” procedure to an electronic platform including the automatic transfer of securities.