samchain/econo-pairs-v1 huggingface dataset:
10  Adelino, M., Song, M. and Robinson, D. (2014), “Firm age, investment opportunities and job creation”, NBER Working Paper 19845, January. 11  The Financial Stability Board defines shadow banking as “credit intermediation involving entities and activities outside the regular banking system”, a definition which ranges from more transparent and regulated entities such as institutional investors and money market funds to highly complex and unregulated entities such as structured investment vehicles and special purpose entity conduits. 12  “Finance for Growth”, Report of the High Level Expert Group on SME and Infrastructure Financing, December 2013. 6  BIS central bankers’ speeches  quality securitisation in Europe, which the ECB and the Bank of England have been jointly pushing.13 Securitisation has the double benefit that it not only encourages existing originators to extend more SME loans, but to the extent that it partially removes credit risk from bank balance sheets, it may also help smaller, less diversified originators to enter the SME loan market. In this way, it could also mean that SME lending is less dependent on a few large banks in each country. It is worth reflecting, however, on what the new normal should be once the credit cycle picks up. On the one hand, there clearly benefits to having a more balanced financing mix. It is useful not only to provide a cyclical cushion in bad times, but also to increase market contestability and reduce over-banking in normal times.

The management of the Global financial crisis and its aftermath in the advanced economies have highlighted the importance of this aspect of leadership. How then do we unleash and harness the leadership energy to perform and be effective in this new and more challenging environment. It lies in self-hacking the mind and the heart. We can draw inspiration from the brain-training secrets of the Olympic athletes which start with oneself and the ability to tap into our internal reservoir of strength. Just like athletes, one can tap into this impressive mental prowess to train the mind to remain focussed eliminate distractions, reduce stress and anxiety and build the stamina needed to achieve optimal performance. In the business of Central Banking – a business that I have described as being “an unfinished business” because there are always new challenges on the horizon, endless demands emerging in an ever changing and more complex environment and great  BIS central bankers’ speeches  1  expectations that the Central Bank will provide the solutions and the necessary actions to resolve the monetary, financial and economic problems that continue to confront our world. In conditions of financial and economic crisis, a phenomenon that has now become more frequent, in which Central Banks are at the forefront in its management. The drive to deliver in the face of great odds from my experience has been about having great focus on the results and goals to be achieved and a strong conviction of how this might be pursued.
These steps will cut any remaining ties between the SNB’s monetary and investment policy and Libor. Page 3/5  Zurich, 17 December 2020 Andréa M. Maechler  News conference  Charts  Page 4/5  Zurich, 17 December 2020 Andréa M. Maechler  News conference  Page 5/5

Several inflation-targeting central banks (including the Bank of England, Norges Bank and the Riksbank) have for other reasons already extended their forecast horizon from the previously common two years to three years. There is nothing that in principle prevents an inflation targeter from considering forecasts beyond a three-year horizon, but in practice there is usually little information about anything at longer horizons except the tendency to revert to the long-term average. What about “leaning against the wind” (as advocated by, for instance, Borio and White, 2003, and Cecchetti, Genberg and Wadhwani, 2002), the idea that central banks should raise the interest rate more than what appears to be warranted by inflation and resource utilization to counter rapid credit growth and rising asset prices? It has sometimes not been quite clear whether advocates of leaning against the wind mean that credit growth and asset prices should be considered targets and enter the explicit or implicit loss functions alongside inflation and resource utilization, or whether they mean that credit growth and asset prices should still be considered just indicators and are emphasized only because credit growth and asset prices may have potential negative effects on inflation and resource utilization at a longer horizon. In the latter case, leaning against the wind is a way to improve the stability of inflation and resource utilization in the longer run. Then it is completely consistent with flexible inflation targeting.
Crucially, rising inactivity among the working age population represents an adverse supply shock, which adds to the difficult shorter-term trade-offs facing monetary policy. Looking back to a year or so ago, the MPC debated whether the prospective end of the furlough scheme introduced during the pandemic would release furloughed workers into the labour market and ease the tightness emerging in the labour market. This was a difficult judgment to make, given that the furlough scheme was without precedent. As it turned out, that easing did not materialise: through the middle of this year, the labour market has continued to tighten and has proved tighter than we had expected, largely owing to the adverse developments in participation that we did not fully foresee. Brexit may also have weighed on labour supply. While aggregate levels of immigration into the UK remain elevated, the loss of flexibility associated with the end to free movement of EU workers into the UK may have steepened the Phillips curve, as post-Brexit immigration has proved less effective in addressing labour market mismatches and more costly for employers. Page 7  Now that the economy has slowed (and probably entered recession), we are starting to see labour market indicators turn. Vacancies have stabilised and there are tentative signs they will fall from their historically high levels. Should economic slack emerge and unemployment rise as the latest MPC forecasts imply, that will weigh against domestic inflationary pressure and ease the threat of inflation persistence.

We are also looking very seriously into the possibility of a wholesale central bank digital currency: it would play a key role as the safest settlement asset, and would thus continue to anchor the monetary and financial system, even as the latter becomes partially tokenised. This is why the Banque de France is going to add, alongside some of you, three more experiments to the nine already carried out; it is also with this in mind that the Bank organised a pioneering international conference on 27 September on the tokenisation of finance. On a regulatory level, France was one of the first to propose a new DASP status under its 2019 PACTE Law, which has since been attributed to 54 players. Europe has provided a pioneering regulatory framework for crypto-assets thanks to the MiCA regulation; following the agreement obtained under the French presidency, it is crucial that it be adopted, and as quickly as possible. In the meantime, we will remain extremely vigilant regarding the risk of regulatory arbitrage in Europe. On a global level, it is imperative that the other large jurisdictions – including the largest one – now implement the shared recommendations of the G20 and FSB on consumer protection, financial stability and the prevention of money laundering. We all confirmed our agreement last week in Washington: this is good news for “trusted innovation”, but we need to turn our words into action on everything, and quickly, following the examples of France and Europe.
Pillar 2: Supervisory Review Let me also briefly touch upon the two other pillars of the revised capital adequacy framework – supervisory review and market discipline. These topics are certainly familiar and important ones to all of you. 9  BIS Review 75/2000  As I mentioned in the context of the internal ratings-based approach, supervisory review of capital is a critical complement to minimum capital requirements. The task for supervisors in the revised framework is to evaluate how well banks are assessing their capital needs relative to their risks, including whether banks are appropriately addressing the relationship between different types of risk. I want to stress that this proposed approach is in no way intended to replace the judgement and expertise of bank management, or to shift responsibility for capital adequacy to supervisors. On the contrary, it is well understood that bank managers have the most complete understanding of the risks their institutions face, and it is they who have primary responsibility for managing those risks. Most importantly, in proposing this second pillar, the Committee intends to foster a more active dialogue between banks and their supervisors, such that when deficiencies develop, prompt and decisive action can be taken to restore capital. Pillar 3: Market Discipline The third pillar of the new capital adequacy framework, market discipline, will serve to reinforce capital regulation and other supervisory efforts to promote the safety and soundness of banks and financial systems.

I applaud the significant progress being made by the International Accounting Standards Committee and look forward to the continued cooperation between the Basel Committee and the IASC toward achieving the goal of harmonization. Official supervision While effective bank level management and meaningful market discipline are crucial elements of an overall strategy for promoting and preserving financial stability, neither can substitute for the critical role played by official supervision. While banks perform functions that are indispensable to the success of any market economy, these same functions, by their very nature, introduce risks that are capable of undermining the prospects for such success. This reality was acknowledged by Adam Smith over two centuries ago in his seminal tract The Wealth of Nations. And it is with this fundamental reality in mind that governments have long recognized that banking and other financial institutions must be subject to at least some form of regulation and official oversight. The reasons for official supervisory intervention in the banking and financial system can be summed up as promoting financial stability and minimizing systemic risk. This is a broad mandate – to ensure that markets operate in a fair, transparent, and efficient manner, and that participants comply with the rules of the game. To successfully fulfill this critical responsibility, it is clear that the fundamental approach, scope and methodologies of official supervision must evolve in line with the way financial institutions manage their activities, which increasingly is along business lines rather than legal entities.
In other countries, for instance the United States, policy has been conducted so that it has gradually earned increasing confidence within the time-honoured system. In my opinion the rule system is important; it reflects the general commitment to monetary policy and can provide a short cut to credibility. In a democratic society, however, monetary policy is ultimately founded on popular support. That is one reason why it is important for the Riksbank to operate in such a way that confidence is created in the policy of price stability. Among other things, this calls for a clear intellectual framework that can be evaluated and for an open discussion about the direction of monetary policy. Delegates accountable to a democratic body An argument that is heard from time to time in the monetary policy debate is that the delegation of monetary policy’s construction to an independent central bank would be undemocratic. In my view that is incorrect. The Riksbank is an agency of the Riksdag (Sweden’s parliament), which clearly can stipulate the objective which the Riksbank is to aim for. It is worth emphasising, however, that it would naturally be inappropriate for the Riksdag to set up objectives that the Riksbank is not in a position to fulfil, like that - as we saw earlier - of “creating jobs” on a permanent basis. When, but only when, the Riksbank’s objective has been established, will it be possible to monitor operations effectively.

In this way inflation expectations were adjusted in advance to an anticipated pattern of economic policy reactions, whereby high price and wage increases were accepted or accommodated by devaluing the krona. As a result, strong inflationary mechanisms were built into the economy. As we have seen in recent years, once such mechanisms have been established, they are difficult to change. 3. Monetary policy’s rule system Experience has shown that more is needed than proud declarations from political decision-makers that they will safeguard a stable value of money and are not prepared to adapt policy to excessively high wage increases. We heard plenty of that in the 1980s. One way of enhancing credibility that has been found to work well and is supported by economic theory is for the democratically elected body to delegate monetary policy to a central bank with a clear, specified obligation to safeguard the value of money. The central bank is given full control over the instruments, principally the short interest rate, for fulfilling the stipulated objective. This arrangement limits both the room for short-run attempts to boost employment and the risk of inflationary mechanisms taking root in the economy. That also lessens the risk of a repetition of what happened in the early 1990s when the inflation bubble burst and unemployment rose. Credibility provides greater manoeuvrability It may be worth underscoring that a system where price stability is credibly delegated to the central bank can confer greater freedom of action in economic policy.
Constantinos Herodotou: Central Bank Challenges in a world of growing uncertainties - the conduct of monetary policy and the evolution of traditional banking Speech by Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, at the ICPAC Mediterranean Finance Summit, Limassol, 5 May 2022. *** Dear guests, dear co-speakers, it is a pleasure to have the opportunity to speak to you here today. These days our thoughts are with those affected by the tragic events of the Russian invasion in Ukraine. Beyond the human loss, Russia's war against Ukraine has disrupted further the global supply chains and in effect growth and inflation patterns around the world and the euro area economy. Europe faces both supply disruptions and surging prices for commodities and raw materials, problems exacerbated by the region's dependency on Russian oil and gas. How the euro area economy performs will greatly depend on the magnitude and time length of the conflict, the side effects of current sanctions on the euro area and on possible further measures. I will first describe the current economic developments in the euro area as regards growth and inflation outlook and the ECB's monetary policy stance and challenges under the prevailing uncertain geopolitical situation. As the supply disruptions from the acute phase of the pandemic were easing, the war and the consequent sanctions imposed on Russia are causing a new negative shock that is weakening the pace of the post pandemic recovery, creating new supply-side bottlenecks and increasing inflationary pressures for longer.

Total new lending to households in 2021 amounted to € which is higher than the € credit that was granted during the pre-pandemic year of 2019 and well above the € granted during 2020. The momentum has been maintained in the first two months of 2022 as well, since the new lines of credit amounted to € against € last year. Total new lending to businesses in 2021 accumulated to € which is higher than the € granted in 2020 but subdued when compared with the € granted in 2019. It is evident that the banks' financial position, the regulatory measures and initiatives taken by both the European Central Bank and Central Bank of Cyprus are the factors that contributed to this positive post-Covid development of the banking sector providing support to the economy. However, banks must, for their own good and profitability as well as for the good of the Cypriot economy, become better and more efficient at serving their clients. I have made this point to the CEO's and Chairmen of the banks a number of times and I also called a meeting between the CBC, economy stakeholders like KEBE, Institute of Certified Public Accountants of Cyprus, the Cyprus Bar Association and the Cyprus banks to promote and facilitate better and more efficient ways of doing business with the banking sector. Whereas as agreed, follow-on meetings have subsequently taken place  3/5  BIS - Central bankers' speeches  between the stakeholders, I'm forced to say that I have not seen practical progress.
Unfortunately in reality what may seem to be a perfect match does not exist in Asia. A large part of the savings in Asia have been channelled through the banking and other financial market channels to the advanced markets and then part of these savings are channelled back to Asia. This pattern of flows has created several problems. Most importantly, with the implementation of Basel III, banks no longer find it attractive to lend to long term infrastructural projects because of the higher capital charge required to hold these assets on their books. More specifically, many European banks, which were very active in infrastructural financing in Asia in the past decade, have reduced their exposures in this area and will continue to do so in the future. So many infrastructural projects in Asia are now finding it increasingly difficult to secure the necessary finance. At the same time, many bankers and fund managers have said that there is still ample supply of funds looking for investment opportunities, but lending or investments in Asia’s infrastructure has been greatly hampered by the shortage of “bankable” projects. So on the one hand Asia has a huge funding need for infrastructural projects but on the other bankers and investors sitting on huge amounts of savings complain that they cannot find sufficient “bankable” projects. Clearly there is a big gap here. There are many reasons why such gap exists, involving factors relating to legal, governance and political risks for investing in Asia’s infrastructure.

Massive amounts of capital, mostly in the form of external bank borrowings, flew into Emerging Asia during this period. In 1997, total amount of international bank lending to Asia amounted to $ Most of these external finance were denominated in US dollar and with rather short tenor. Of course we now understand this kind of external finance is very risky as it entails currency mismatch and maturity mismatch. But these risks were simply ignored or brushed aside while everybody was enjoying the Asian boom prior to 1997. Then the bubble burst and the crisis-hit Asian economies all learnt very important lessons in a bitter way by paying a heavy price. 4. Since the Asian Financial Crisis the Emerging Asia has implemented many structural reforms and has now re-emerged as stronger and more resilient economies. 5. As a result, Asia, once again, has gained centre stage and, until the last year or so, become the preferred destination of international capital flows. Unlike the 1990s, the structure of finance in Asia has changed because external bank borrowings, although still quite significant, have been overtaken by bond borrowings. Around 80% of bond issuance in the last three years in major Emerging Asian economies was denominated in domestic currency, thereby reducing currency mismatch risk for the borrowers. Moreover, the average tenor of the newly issued bonds has steadily been lengthened to 6.3 years in 2013, which would mitigate the risk of maturity mismatch and short term roll-over risk. 6.
Rising trade tensions and the growing use of sanctions as an instrument of foreign policy have meant that the laws of the United States are increasingly being applied outside its jurisdiction. This takes the form of penalties for societies outside the United States and the prevention of access to the US payment system and is based on the central role played by the US financial system and the US dollar in global trade. Several European governments believe that this situation could be mitigated by increasing the international role of the euro. But if markets are to entertain the possibility of an enhanced role for the euro, we need to consider what the conditions are that underpin the dollar’s dominance. The list is long, but the fact that the dollar is an expression of an integrated capital market is certainly one of those conditions. [34] For the EU to meet that condition – which, at this stage of its development, is more achievable than others – would require a complex programme of legislative and institutional harmonisation, which however could be put in place in short order. 6 / 10  BIS central bankers' speeches  The second reason why an institutional approach can help produce better outcomes is that institutions and their actions can be subject to more clearly defined democratic control. Precisely because those institutions are invested with a mandate and defined powers, it is possible to make a more direct link between decisions and responsibility.

[18] And while the ECJ recently ruled against the Commission in a tax exemption case, it also recalled that special tax deals between multinationals and individual countries can constitute illegal state aid, which the Commission has the right to examine. [19] Second, the EU offers much greater possibilities to defend consumers’ values and ensure that they are treated fairly within the European market. This has been visible in the EU’s ability to enforce its values concerning privacy through the General Data Protection Regulation. [20] It has been visible too in EU regulations to bring down mobile phone roaming charges for consumers within Europe,[21] or to ensure that they cannot be charged more for cross-border payments in euro within the EU than they would be for national transactions. [22] The third advantage is that countries have the possibility to coordinate within the EU to defend social protections without imposing trade restrictions. Through the Charter of Fundamental Rights, EU law has reduced the possibility of unfair competition from jurisdictions with laxer labour laws. And it has also helped raise labour standards within the EU. A case in point is the European Directive on Part-time Work in 1997, which reduced certain forms of discrimination that were still in place in 10 of the then 15 EU Member States,[23] including Italy. OECD analysis finds that, over time, the introduction of equal treatment laws was associated with an increased likelihood of people being awarded permanent contracts.