samchain/econo-pairs-v1 huggingface dataset:
I outlined earlier the reasons why monetary policy has only limited capacity to deal preemptively with financial bubbles. Similarly, I see little prospect that supervision will have the capacity to identify and address potential concentrations in exposure to individual risk factors, whether through changes to capital charges or other means. Focusing on the quality and strength of cushions against tail risk is the best way for supervision to be countercyclical rather than procyclical. The subtitle of your conference is, I believe, “Where’s the Risk?” And as this implies, there is still substantial interest in markets and official circles in finding ways to use greater transparency to improve the capacity of markets, and supervisors, to try to address emerging risks early, to let the air out of crowded trades and concentrations of leverage or risk before they reach potentially troubling proportions. We will continue to explore ways to improve the quality of public disclosure by financial institutions, and other sources of information on financial activity. But we do not have the capacity to put in place a transparency regime over markets that would give people a real-time picture of the incidence and magnitude of potential risks. The pace of change is too rapid, the number of positions, funds, and institutions too great, and the analytical challenge too complex to offer the promise of that type of early warning system. The conditions we see prevailing in global financial markets today reflect a range of different factors, some fundamental and others that are less likely to be enduring.

Growth in the US economy has slackened. The US housing market has weakened and employment is rising at a slower pace than earlier this year. There are also signs of somewhat slower growth in western Europe. Economic growth in emerging economies remains strong, particularly in China. Developments in these countries are of growing importance for the world economy and for our own economy. China, India and Russia have accounted for close to half of overall global growth over the past year. In spite of weaker prospects for the US and western Europe, oil prices have increased since the October Monetary Policy Report and prices for other commodities remain high, partly owing to continued strong growth in demand from Asia. Uncertainty surrounding developments in the world economy has heightened as a result of the turbulence in financial markets this autumn. The turbulence was triggered by problems in some segments of the US housing market. Many borrowers were granted mortgages they cannot service now that the interest rate has risen. There were losses, particularly on loans in the bond market and in complex loan products owned by separate companies that had relied on very short-term financing. These companies are linked to the large international banks, and the banks have had to transfer loans onto their own balance sheets. Combined with higher losses, this limits banks’ capacity to extend new loans to the housing market and other sectors, and will thereby have a dampening impact on economic growth.
The Custodian of the Two Holy Mosques -may Allah preserve him- has taken a wide range of important decisions and measures aimed at restructuring and regulating the economy, updating the laws to enhance the level of efficiency and competitiveness in the economy and support optimal operation of the factors of production, apart from providing an advanced regulatory and administrative framework and attractive environment for domestic and foreign investment to achieve diversity in the economic and production environment in order to continue to create appropriate job opportunities for the sons and daughters of this country. The most prominent indicators of the economic development achieved are: the increase in the real GDP of the non-oil sector by 81.4 percent over the period from 2005 to the end of 2013, the balance of payments recorded a surplus of SAR 3.6 trillion, the actual government expenditures amounted to SAR 5.7 trillion, and the public debt to GDP ratio declined from 37.3 percent at the end of 2005 to 2.7 percent at the end of 2013. Many development projects have been approved for strengthening and streamlining the infrastructure, including roads, airports, telecommunications, water and electricity, health and education services, in addition to the Scholarship Program of the Custodian of the Two Holy Mosques for pursuing higher education abroad which is a long-term investment in human resources. The Kingdom has maintained high sovereign ratings of solvency as indicated by international rating agencies.

Acting through these channels, monetary policy helps to ensure that the downturn is not needlessly protracted and helps to reduce the risk that unemployment becomes entrenched at too high a level. Inflation is now above the inflation target, but we have always held the view that this has been a transitory consequence of the sharp krone depreciation in spring 2020. Low economic activity and high unemployment have a dampening effect on wage and price pressures, and we expect inflation to fall below the target in the coming year. An expansionary monetary policy stance contributes to normalising economic activity, which will in turn contribute to pushing up price and wage inflation further out. Last year we were concerned that a fall in house prices would amplify the economic downturn. The situation has since reversed. High house price inflation over the past year reflects low interest rates, but the Covid-19 pandemic itself has likely increased the willingness to spend money on housing. We are at home more and are less able to spend money at restaurants, on travel or on other experiences. A sharp rise in house prices tends to be followed by faster growth in household debt. This may lead to a build-up of financial imbalances, which in turn could amplify a future economic downturn. Weight is given to this consideration when making monetary policy trade-offs. As economic conditions normalise, it will be appropriate to raise the policy rate.
Fernando Restoy: Capital requirements and banking union Speech by Mr Fernando Restoy, Deputy Governor of the Bank of Spain, to the Analistas Financieros Internacionales (AFI) conference on banking regulation, Madrid, 27 January 2014. *  *  *  Good morning. Thank you, Emilio, for your kind introduction and for the invitation to take part in this AFI (Analistas Financieros Internacionales) conference on banking regulation. As we move into 2014, we face a year of major challenges for the banking industry. This is so, above all, because of the historic importance of the start-up of the single supervisory mechanism, which will effectively come on stream next November. At that point the ECB will assume supervisory powers over the main euro area banks. And this institutional change, marking the origin of the banking union, will come about against a background of deepseated changes in the regulatory framework of banking activity. Allow me to begin by reviewing some of the latest regulatory changes in the prudential field, before sharing some thoughts with you on the ongoing construction of the banking union in Europe. Solvency regulations One of the pillars of the financial reform, which arose in response to the shortcomings evidenced during the crisis, has been the measures aimed at strengthening bank solvency. As you know, the new solvency rules, known as Basel III, have been applied since the start of this year in the European Union. They have been incorporated into legislation through a Directive and a Regulation on capital requirements.

The requirement for increased flexibility in the labour market could apply both to increased variability in nominal wage increases and to increased geographical and professional mobility of the labour force. Increased adaptation to the rate of wage increase in the Euro area and increased variability in nominal wage costs? The design of the negotiation system probably has significance both for the adaptation of wage increases to that within the Euro area and for the degree of nominal wage flexibility. Wage formation in Sweden can be characterised by a combination of centralised and decentralised agreements. During 2001 trade and industry had a relatively high percentage of agreements with local wage formation. Almost 70 per cent of employees in the private sector had wage agreements that entailed complete or partial local wage formation. The percentage of local wage agreements in the public sector has also increased during the 1990s. A more decentralised wage formation process could entail greater nominal wage flexibility, as wage costs could then be connected to a greater extent to the individual company’s situation. On the other hand, a more co-ordinated wage formation could also entail increased flexibility, as it would make it easier for those determining wages at a central level to take the overall considerations required to enable the economy as a whole to develop favourably. It is unclear to what extent a potential Swedish participation in Stage Three of EMU would entail incentives for a more decentralised or more co-ordinated wage formation process.
Il est important que le dialogue entre tous les États européens se poursuive, même si le passage à l’euro modifiera l’environnement économique traditionnel de l’Union européenne ; c’est la raison pour laquelle le groupe de l’Euro 11, composé des ministres des Finances de la zone euro, a été constitué et s’est déjà réuni plusieurs fois. Le dialogue entre toutes les parties concernées doit prendre en compte l’indépendance totale de la BCE et l’objectif de la stabilité des prix qui, en vertu du Traité, doit guider la politique monétaire de la zone euro. En particulier, la coordination entre les 15 pays permettra à ceux qui n’ont pas encore rejoint l’Union monétaire de converger vers la zone euro. Le nouveau mécanisme de change qui va lier à l’euro certaines des monnaies concernées (c’est le cas de la drachme grecque et de la couronne danoise er depuis le 1 janvier 1999) apportera sa contribution à ce processus. En favorisant la stabilité des taux de change, le nouveau MCE permettra le bon fonctionnement du marché unique et aidera les pays “ out ” à se qualifier pour la monnaie unique. b) L’Union monétaire aura aussi des relations étroites avec des pays extérieurs à l’Union européenne. 7  BIS Review 22/1999  Premièrement, l’Union monétaire et l’Union européenne constituent un pôle attrayant pour nos voisins de l’Europe centrale. Les résultats atteints par certains d’entre eux au cours de ces dernières années témoignent de progrès remarquables.

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
In this same respect, in the case of households and non-financial corporations there are still some segments in a position of high financial fragility. For instance, in the case of companies, the smallest firms are more vulnerable to a scenario of declining revenues. But, moreover, in a crisis such as that at present where - as I have said - the pandemic is affecting different regions and sectors in differing ways, the downturn in institutions’ solvency will foreseeably depend on their degree of exposure to such firms. Third, the materialisation of losses in the credit portfolio as a result of the pandemic will directly affect bank profitability, as the preliminary results of significant situations for 2020 Q1 suggest. Profitability was already low before the outbreak of the crisis: as in most European economies, the profitability of Spanish financial institutions stood, on average, below the cost of capital last year. The crisis has meant that this spread has tended to widen. The COVID-19 crisis will adversely impact banks’ already modest profit-generating capacity. As in the case of solvency, it will affect different institutions differently depending on their business model and on the distribution of their exposures to the sectors and regions most affected by the pandemic. Moreover, the crisis has bolstered the prospect of the current scenario of low interest rates remaining in place.

The wider use of commodity murabahah transactions will also add breadth and depth to the Islamic money market as it facilitates a more efficient distribution of money-market liquidity and expands the range of instruments that market participants can actively transact in. We are pleased to announce that Bank Negara Malaysia will soon be adding murabahah-based transactions to our already diverse range of policy instruments to manage short-term liquidity in the Malaysian Islamic inter-bank money market. The Bank Negara Malaysia's murabahah basedtransactions may either utilise global or Malaysian commodities as the underlying transaction, and in the future, other Shariah-approved assets similar to the Ijarah sukuk notes. The widespread usage of this globally practised financing instrument would allow market participation by a more extensive investor base, including those from the Middle-East. Product innovation must be a continuous and deliberate part of the process of market development. We are therefore firmly committed to developing the capabilities in Islamic finance and strengthening the global pool of talent and expertise in Islamic finance to increase the potential for this to happen. As part of the initiative to meet this objective, we have established the International Centre for Education in Islamic Finance, INCEIF, in March this year to offer professional certification programs in Islamic finance, in addition to, Masters and Doctorate programs. Bank Negara Malaysia has also recently  2  BIS Review 74/2006  made available a Shariah Scholarship Award and Shariah Research Grant, available to Malaysian and non-Malaysians seeking to pursue research studies in Islamic finance.
Regulations of Anti Money Laundering (AML) and Know Your Customer (KYC) should be enhanced to prevent such risks. Finally, use of digital services requires better telecommunication infrastructure and internet access in some areas. Central Bank Digital Currencies Central Bank Digital Currencies (CBDC) represent an even more ambitious project that could be developed with a Blockchain/DLT infrastructure. A CBDC could imply several advantages for its users: (i) lower costs and higher speed for the interbank market; (ii) the possibility to implement central bank open market operations in a calendar of 24h/7days and reduce the current overnight transaction risk; (iii) an easier framework to pay interests on central bank currency and avoid restrictions coming from a zero-lower-bound (ZLB), and (iv) separate the current joint roles of credit and money creation by commercial banks, creating a more narrow banking system in which banks and financial institutions work with a 100% equity and no leverage. 12  Central Bank of Chile 29 June, 2017  Allowing a massive access, the balance sheet of the central bank creates almost unsurmountable challenges and risks, though. The main challenge is to move from a few dozens of wholesale partners to thousands or even millions of retail account holders, many of which could massively join as a part of a run on commercial banks.

In particular, it introduced new bridge refinancing operations for banks, improved the conditions of the existing TLTRO III refinancing operations (which give banks incentives to lend to the real economy) and relaxed the collateral framework in order to increase the amount of funds that banks can obtain in these operations. Additionally, with the aim of easing financing conditions in fixed income markets and averting their fragmentation, the ECB increased the size of the existing asset purchase programme by EUR 120 billion and introduced a new programme (the Pandemic Emergency Purchase Programme) for an amount up to EUR 1.35 trillion. The design of this programme allows for a higher degree of flexibility in the distribution of purchases both over time and across regions to make it more efficient. Finally, financial policies have also played a role in supporting bank lending. In particular, both macroprudential and microprudential requirements on capital and liquidity for European banks were relaxed. Additionally, the European regulation on capital requirements was reformed, with rule changes affecting sovereign exposures, impairments on nondefaulted exposures, SME support factors and software deductions, among other elements of bank capital calculation. These latest regulatory changes generally involve an increase in banks’ capital ratios. In order for banks to preserve loss-absorption resources in the near future, the ECB and national authorities asked banks to halt dividend distributions until 1 January 2021, and also to refrain from share buybacks and to apply moderate variable remuneration policies.
BIS central bankers’ speeches  3  A second was to pass regulatory reforms to lessen the risk of future financial-market crises and ensure too-big-to-fail entities never again place the U.S. in a position where taxpayer funds must be used to bail out bad private-sector actors. A third was to restructure government debt while long-term rates are at historic lows. Within the next four years, 58 percent of U.S. government debt will mature. And though short-term rates are low now, they won’t be low forever. When the existing debt matures, rates are sure to be higher and servicing the debt will take a bigger share out of the budget, leaving less to spend on everything else. One sobering statistic is that net interest payments on the debt are scheduled to nearly triple by the end of the decade, rising from $ billion in fiscal year 2013 (1.3 percent of GDP) to $ billion in fiscal year 2020 (2.8 percent of GDP). I would say that this era of cheap money is one of missed opportunities on all three of these fronts. To add insult to injury, there are increasing signs quantitative easing has overstayed its welcome: Market distortions and acting on bad incentives are becoming more pervasive. Stock market metrics such as price to projected forward earnings, price-to-sales ratios and market capitalization as a percentage of GDP are at eye-popping levels not seen since the dot-com boom of the late 1990s.

News of Fed tapering in late spring last year reversed the flow of capital into EME-dedicated equity and bond funds, and emerging market currencies depreciated against the dollar. Sovereign debt yields rose sharply in vulnerable emerging market nations such as Brazil and Turkey. Sovereign debt spreads edged up in Mexico also, but significantly less so than in other EMEs. Much like in the morning after a party the night before, investors woke up sober and more discriminating. Why Mexico stands apart There are concerns that the outsized capital flows to EMEs during the QE era pushed down interest rates and led consumers and businesses to take on too much debt. Mexico seems better positioned than many other countries in terms of this risk exposure. While according to the Banco de Mexico, private lending is up 38 percent since its recession low in 2010, international comparisons based on World Bank figures show the rate of credit expansion in Mexico pales in comparison to other emerging market nations. Between 2009 and 2012, private lending as a share of GDP grew 5 percentage points in Mexico while jumping 20 percentage points in Brazil. The level of debt exposure is also lower in Mexico than in many other emerging market nations. Private lending as a share of GDP was 28 percent in  4  BIS central bankers’ speeches  Mexico in 2012, compared with 35 percent in Indonesia, 54 percent in Turkey and 68 percent in Brazil.
31.08.2019  The European economic policy response to a scenario of lower growth and inflation La Granda Summer Courses Pablo Hernández de Cos Governor  Distinguished rector, honourable mayor, academic authorities, dear students, ladies and gentlemen. Let me begin by extending my particular thanks to Professor Velarde for his kind invitation to participate in the closure of the 2019 La Granda summer courses. It is an honour for me to be here in this building, whose doors are open to all those interested in discussing and delving into the essential issues ever-present in these courses. Today I would like to share some thoughts with you on the complex economic outlook the European Union (EU) and, in particular, the countries comprising the euro area currently face. This is at a time when free trade, the bedrock of the European project and an essential source of the improvements in economic well-being in recent decades, is subject to continuous threats. I shall first describe the latest economic developments and the main challenges ahead. Then I shall analyse what, in my opinion, the economic policy responses to these challenges should be. The return of protectionism Only two years ago the global environment was a favourable one. It was marked by a synchronised expansion of the emerging and advanced economies, reflected in the highly robust world trade performance. But the international economic setting turned more unfavourable in 2018. This situation has run into 2019 to date, with a slowdown in growth (acutely so in manufacturing) and, in particular, in trade.

Some countries, such as France and Spain, which have remained more buoyant in this period, have also posted slowdowns – to 0.3% and 0.5%, respectively – in the second quarter of the year. 5 In contrast, the most favourable factor since the onset of the economic recovery in the euro area has been the improvement in the labour market. This has been at the root of household income growth. During the current upturn, employment has responded forcefully to GDP growth. The unemployment rate currently stands at 7.5% of the labour force, very close to the historical low seen in the pre-crisis years. Strong job creation has contributed to reducing labour market slack. This has begun to be mirrored in wage growth and in an increase in labour income, which has enabled consumption to play a key role in euro area growth. That said, labour continues to be underutilised in some economies in the area. Yet in the euro area as a whole, the rise in wages and in unit labour costs has not fed through to prices, which has prompted a contraction in business mark-ups. In fact, the globally prevalent moderate inflation and growing competitive pressures, along with the increased uncertainty over future euro area exports, would account for firms’ heightened caution when passing through labour cost increases to the prices of their products. The upshot is that, excepting the oscillations associated with more volatile items such as energy or certain services (e.g.