samchain/econo-pairs-v1 huggingface dataset:
Although differences in policies are not completely unexpected now that the collapse scenario has been reduced, they do show that the international financial architecture still lacks sufficient leverage to coordinate the interests of the different countries. Symptoms of imperfect coordination can be seen across the board today and, unfortunately, the euro area is no exception. As I have mentioned and illustrated above, a lack of coordination leads to national responses which can generate negative externalities. Recovering the sense of common purpose shared at the height of the crisis remains of the essence when designing the right policies at the global level. In these circumstances, it would be of paramount importance to reinforce the efforts to keep cooperation and dialogue open, and this Seminar is intended to contribute to that goal. The other area where international cooperation is definitely needed is in the construction of global safety nets as a way to reduce global financial risks. A wider use could help mitigate certain policies that may be detrimental to global stability from a collective standpoint, such as excessive reserve accumulation. In that respect, additional work is needed to improve the incentives associated with IMF lending facilities for emerging market economies and to address more effectively the traditional problems associated with them (for instance, the stigma problem). International fora are well suited for resolving these coordination problems. That brings me to the end of my introduction to the Seminar.

In any case, the relatively mild recession and the favourable prospects for banking business in Latin America have encouraged Spanish banks to maintain or even increase their activity in the region at a time of hardship at home. This last factor is indeed an example of the benefits of preserving financial globalisation: strong economic prospects in Latin America have helped Spanish companies to build an important buffer against the deterioration in the domestic market, with an important contribution to our own financial stability. Let me briefly address my third and final point today: the need to maintain the highest degree of global policy cooperation. The immediate crisis response by the international community was first coordinated in the revamped G20. The crisis showed, on the one hand, that the national policies of systemic economies had long neglected the spillovers of their own policies on other countries and, at the same time, that some of these policies entrenched unsustainable patterns of growth. In addition, as mentioned before, the crisis exposed countries to sudden and severe liquidity shortages. Against this background, the G20 has pledged a significant strengthening of both global surveillance and global financial safety nets. The measures taken and the coordination involved highlight the remarkable unity achieved in response to the crisis. However, as the recovery gathers steam at different speeds, some  1  4  See Kamil and Rai (2010), Galindo, Izquierdo and Rojas-Suarez (2009). BIS Review 172/2010  dissent has surfaced.
Both the Spanish economy and its banking system suffered and continue to suffer from the coincidence of these three high-intensity crises, any of which may return at any time, since the economy moves in waves. But it appears highly unlikely that the conjunction of three such crises could recur for many years. The challenges Spain had to face at the onset of the crisis were enormous. Public attention has focused on cutting the budget deficit, but the tasks of reducing the towering debt accumulated by households and firms, and that of regaining lost competitiveness within a monetary union are also huge. A Latin American colleague used a metaphor which, while exaggerated, clearly expressed the difficulty ahead of Spain: “regaining competitiveness”, he said, “is like painting a house. If your brush is the exchange rate and it is flexible, you simply let it move from the top downwards. But since in Spain you’re in the euro and you can’t move the brush, all you can do is move the house upwards from below”. The task is an arduous one but not impossible if we believe that, though it is very difficult, we are capable of changing and reforming. This is why I shall begin my speech with an optimistic message, offering you some examples showing how Spain has already progressed with some adjustments and has undertaken major reforms during the difficult times we have faced during these years of crisis.

While we should be proud of our many achievements these years past, we must also be ready to listen to others, particularly and attentively so to the European institutions which, lest we forget, have been buying us time so that we can see through our adjustments. It is not the time for pessimism, but nor is it for complacency. What we must do is fruitfully use the time we have. Thank you. BIS central bankers’ speeches  7
With inflation too high, we are focused on restoring price stability, while maintaining a strong labor market. Before I go any further, I should give the standard Fed disclaimer that the views I express here are my own and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or anyone else in the Federal Reserve System. Shared Impacts It's striking to think that just two years ago, the U.S. economy was reaching the trough of the COVID-19 recession. Back then, we were living through unprecedented lockdowns. And we had no way of knowing that this would be the shortest recession on record, or that the rebound would be so dramatic. If we think about the global pandemic as a common factor, shutdowns, contractions, and rapid rebounds were the shared impacts across countries around the world. But so were supply-chain bottlenecks, shortages in semiconductors, and backlogs at portsissues we grapple with today. And just like the United States, other countries have experienced imbalances in demand. Since the initial lockdowns, people have spent more of their money on electronics, cars, and furniture-and less on entertainment, travel, and restaurants. 1/5  BIS - Central bankers' speeches  Many nations also showed considerable resilience of economic activity through the Omicron wave. But global risks remain. The BA.2 variant is now fueling a rise in cases in some countries, including China, Hong Kong, and the United Kingdom. Their experiences bear close monitoring.

This implies reviewing the scope and content of certain regulations to ensure that the regulatory framework is favourable to innovation and neutral with respect to technologies, but also guarantees an appropriate and homogeneous treatment of risks throughout the financial system according to the “same activity, same risk, same rules” principle. (e.g. non-bank financial players, technology service providers, issuers and managers of crypto asset trading platforms) Thank you for your attention. 2/2  BIS central bankers' speeches
Let me add that I do not forget myself that central bankers, by definition, have a multipartisan responsibility. Why? Price stability is a common benefit for all citizens, regardless of their political sensitivities and individual preferences. According to a Financial Times journalist, in the absence of structural reform Italy risks being expelled from the euro. Is that true? Italy is a very important economy in the euro area and is of course definitely not at risk of this. I have already said that I do not comment on absurd assumptions. Exactly like all other member countries, Italy does need to do its homework: improving productivity and its public accounts. One of the main stumbling blocks in the negotiations ongoing within the government is the issue of pensions. 2  BIS Review 87/2006  That of pensions is a European problem, due to the ageing population and the resulting pressure on public funds. Without further reforms to pension systems, the contribution rates would need to be doubled in some countries, up to as much as 40% of salaries in some cases, in order to keep a balance in the system’s accounts. But what should be done in these cases? In order to tackle the consequences of ageing populations, we need comprehensive reforms.

The leading economic institutions and private research institutes state that we will probably continue to see a rather dynamic growth rate at a global level. However, you seem to be very concerned with inflation, to the point that many people are betting on a further rate rise before the end of the year, to 3.5%. The primary mandate assigned to us is to guarantee price stability, and we have to be credible in order to be able to anchor inflation expectations. This is extremely important not only for our credibility, but also because it enables a favourable level of medium and long term market interest rates to be maintained. I am convinced that this is also the sentiment of the 313 million European citizens (315 if we include the Slovenians, who will be the next to join the euro area), who are asking us to safeguard their purchasing power by maintaining price stability. Therefore, this is not only what the Treaty commands us to do but also what our European fellow citizens are emphatically asking us to do. Could inflation trends lead you to adjust rates again? After our last meeting in Frankfurt, I said, on behalf of the Governing Council, that strong vigilance remains of the essence so as to ensure that upside risks to price stability are contained. Do you regard the 2% inflation limit as being absolutely inviolable or is there some degree of flexibility? What has to be kept in mind is that we take a medium-term perspective.
An efficient securities clearing and settlement infrastructure is of fundamental importance to the integration and smooth functioning of financial markets. To this end, the Eurosystem supports the Commission’s intention to put forward a proposal for a directive on securities clearing and settlement. On the question of new regulatory initiatives, we share the view that asset management and retail financial services are areas where regulatory intervention could be considered. In the area of financial supervision, the Eurosystem fully supports the Commission’s view that the current institutional set-up should be exploited to the maximum extent before any potential structural change is considered. In particular, the Eurosystem agrees that the main policy objective in the area of financial supervision is two-fold: first, to enhance the competitiveness of EU financial markets and institutions and to facilitate the development of cross-border finance both in terms of institutions and in terms of products and services – the so-called financial integration angle; and second, to ensure the effectiveness of standards for oversight and supervision in a more integrated financial system – the so-called financial stability angle. In this respect, we attach particular importance to the consistent implementation of financial services legislation and the pursuit of supervisory convergence, as well as to the effective cooperation between home and host authorities. We are of the view that it is important that home-host coordination be developed on a robust and consistent basis for the financial groups involved in a way that both ensures effective supervision and reduces compliance costs.

Fadilj Bajrami: Continued cooperation with central banks of the Western Balkans Address by Mr Fadilj Bajrami, Vice Governor of the National Bank of the Republic of Macedonia, on the occasion of the first Programme Steering Committee Meeting of the ECB Regional Cooperation Programme with central banks in the Western Balkans, Tirana, 17 April 2014. *  *  *  Honorable Governor Fullani, Honorable Governor Hamza, Dear Mr. Sturm, Dear Mr. Rumbold, Representatives of central banks, Ladies and Gentlemen, It is my honor and pleasure to be here with you in Tirana on the occasion of the first meeting of the Steering Committee for the joint cooperation project between the European Central Bank and the national central banks of the Eurosystem, and the central banks of the Western Balkans. As my colleagues have already noted, most of the activities of the project will be devoted to identifying the needs of the central banks of Albania and Kosovo in the process of their joining the European System of Central Banks, by strengthening their capacities and compliance with the standards of the central banking in the EU. Last year, the National Bank of the Republic of Macedonia successfully implemented such a project in cooperation with the ECB and the Eurosystem. The project implementation has clearly identified the changes that the NBRM should focus on during its preparations for accession to the European System of Central Banks.
This means that it must offer suitable, cost-effective and quality financial products and services for all segments of society. It must also respond to the changing demographics and structure of the economy. For example, as we move towards becoming a digital economy, the financial sector must accord adequate support to innovative SMEs, such as those involved in e-commerce. Equally important, we must remember that this imperative is not only for banks, but extends to the other parts of the financial sector. Non-banks such as venture capital and private equity firms, as well as alternative financiers such as factoring and leasing companies, have an equal stake in this and should also play a more active role in financing the needs of businesses. The need to bridge the gaps between 20th century finance and the 21st century economy is both compelling and urgent for the whole financial sector as conditions remain challenging for the economy domestically and abroad. This is also certainly not the only time that we will face such challenges. To be safe, finance must not sow the seeds of its own destruction and not serve as an amplifier of risk to the economy. The ability of finance to mobilise capital, create leverage and distribute risk allows it to be a powerful force for good. But excessive and unbridled risk taking creates instability which is harmful not only for the particular firm, but the economy and society at large. There is also a greater need for finance to be socially responsible.

Financial institutions can and must assert the much needed leadership in a world where the continued neglect of equitable development and a rapidly deteriorating environment is displacing communities, raising social and political tensions, and putting future generations at grave risk. Finance still holds the trust of society and substantial influence over economic agents. But this is a privilege earned, and demands that financial institutions behave ethically, and act in the best interest of the communities they serve. The role of technology to revolutionise finance There is no question that technology will lie at the very heart of these imperatives for the financial system. This has been true for decades, only the order of its impact is now, arguably much greater. After all, the world’s first ATM in 1967 transformed the relationship between people and money and making finance more accessible. Today, fintech signals the next phase in the transformation of finance. Fintech holds enormous potential to enhance competition, increase productivity, address unfulfilled consumer demand and fundamentally change the way institutions provide financial 2/5  BIS central bankers' speeches  services – in ways we may not even have fully discovered. Similarly for Islamic finance, adoption of technology could present significant opportunities to reduce the cost of financial intermediation and expand access. For example, distributed ledger technology could enable automated execution of contracts through the use of digital protocols, or smart contracts, which can simplify complex Shariah contractual processes.
The essence of the With Profits contact as I understand it is that the provider offers a guaranteed minimum return, variously structured , plus the prospect of additional returns derived from the return earned on a pooled fund that combines many contracts including over different generations of policyholders. There is of course a logic to pooling returns, but for the policyholder the return can be complicated, and sometimes made opaque, by the practice of pooling different generations of policyholders who may have different expectations on their returns (conditioned, for instance, on changes in the external  BIS central bankers’ speeches  3  environment); and by the practices of smoothing returns and of charging differentially for the economic value of the guarantees. Additionally, problems have arisen because the funds are made up of many different groups of policyholders with different guarantees, some of which, essentially on the annuity side, became increasingly valuable as nominal interest rates fell from the mid 1990’s. The existence of these guarantees was often, at best, unclear or, at worst not disclosed to new joiners to the fund. Bear in mind also that these contracts are long-lived with maturities typically of 25 years of more; and that the With Profits insurers themselves have often built up over many years through the take-over or mergers of many smaller providers, each with their own distinct products, associated policyholder expectations, and administrative “legacy” systems.

The reason for locating insurance and banking in the PRA is in my view that we have learned during the crisis that our job as prudential supervisors is to ensure that the public and users of financial services, including the corporate sector, can be assured of continuous access to the critical services on which they depend. Many financial services may be regarded as critical by their users, but some are distinctive because it is hard for consumers to replace their provider with a substitute without accepting unacceptable cost and loss. Insurers provide critical services to the public in terms of risk transfer and very long-lived savings contracts. This last point draws out that insurance is not a single homogenous industry – general and life insurance are very different activities – and we recognise that in our supervision. It would be unacceptable to the public to have access to risk transfer through, say home or car insurance, or professional indemnity insurance, to name but a few, withdrawn in a disruptive and unannounced way. In the same way, savings contracts that are long-lived and provided by life insurers, and are often an individual’s primary pension provision, are critical financial services that are difficult to replace without unacceptable cost. For me, there is therefore a common feature of banking and insurance in terms of continuity of access to critical financial services. This is not, however, the end of the story on the issue of why the PRA will regulate banks and insurers.
These systems must be solid enough to cope with increased flows of trade and capital. Some countries are not sufficiently well prepared to handle the new conditions of the world economy. Sometimes, countries have deregulated their economies too quickly or in the wrong way. Industrialised countries have deficiencies too. Secondly, requirements increase on coordination of policy among countries. The countries of the world are increasingly dependent on one another. A financial crisis in South-East Asia has effects in Sweden as well. For this reason, we also benefit from other countries on the other side of the world acquiring better systems for, for instance, bank supervision and bankruptcies. This means that we have greater reason to become involved in global issues. We also have reasons to show lenience on issues that are important for Sweden sometimes, in order to create common rules of play and agreements that will benefit everyone. The old slogan “international solidarity” is national self-interest in a very concrete way. International collaboration is thus of great value. Therefore, we have reason to take a great interest in the multilateral organisations for collaboration that exists. The “Bretton Woods institutions” - the IMF, the World Bank and WTO/GATT - were established fifty years ago during a period when the countries in the world economy drew the lesson that the trade wars of the 1930s, payment obstacles and competitive devaluations contributed to unemployment, lower prosperity and war.

Mario Draghi: The future of the euro – stability through change Contribution from Mr Mario Draghi, President of the European Central Bank, published in “Die Zeit”, 29 August 2012. *  *  *  Across Europe, a fundamental debate is taking place about the future of the euro. Many citizens are concerned about where Europe is heading. Yet the solutions presented appear to them unsatisfactory. This is because these solutions offer binary choices: either we must go back to the past, or we must move to a United States of Europe. My answer to the question is: to have a stable euro we do not need to choose between extremes. The reason this debate is taking place is not the euro as a currency. The objectives of the single currency remain as relevant today as they were when the single currency was agreed. To spread price stability and sustainable growth to all European citizens. To reap the gains of the world’s largest single market and make the historic process of European unification irreversible. To raise Europe’s standing – not only economically but also politically – in a globalised world. The debate is taking place because the euro area has not yet fully succeeded as a polity. Currencies ultimately depend on the institutions that stand behind them. When the euro was first proposed, there were those who said it would have to be preceded by a long process of political integration. This was because sharing a currency would imply a high degree of joint decision-making.