samchain/econo-pairs-v1 huggingface dataset:
They are means of automatically, if temporarily, halting the trading race if it gets out of hand – a multilateral disarmament device. Following the Flash Crash, the US authorities altered circuit-breaking rules so that they applied on an across-exchange basis to prevent stress simply migrating between exchanges. It would be useful if the revised trading proposals in Europe under MiFID II contained similar provisions. Finally, safety races by bank investors are being explored by financial regulators. Over the past six months, the FPC has paid increasing attention to the systemic risk posed by rising levels of bank encumbrance. The FSA recently undertook a survey of UK banks’ level of encumbrance which the FPC will consider later this year.33 The issue is also being looked at internationally. There are a variety of policy options to forestall self-fulfilling safety races. One would be greater transparency about levels of encumbrance. Lack of transparency creates an uncertainty premium in unsecured borrowing rates, encourages further secured financing and thereby speeds up the seniority race. Reducing that premium through greater transparency would tend to slow the race, if not stall it. An option for stalling the race would be to place maximum limits on levels of bank asset encumbrance. These would be similar in principle to prudential limits on bank leverage and large exposures. ************ Systems, both social and natural, are characterised by a survival of the fittest. But for both, that competitive race can at times generate unhealthy outcomes for the system as a whole.

Monetary discipline Unlike a fixed rate regime in which a national government can only issue currency if it can provide the backing (such as gold reserves), a floating rate regime allows national authorities to issue currency freely to suit their domestic needs. As we know, national central banks play a crucial role in controlling or influencing the supply of money. By changing interest rates or the price of money, central banks indirectly influence the expansion of credit and thus money  BIS central bankers’ speeches  1  supply. Good monetary discipline is clearly needed to ensure that money or credit expansion does not become out of control. The initial experience in the US with the fiat money regime was not at all successful or pleasant. There was runaway inflation, rising from 5.8% in 1970 to 11.2% in 1979, and, as a result, Paul Volcker of the Fed had to introduce drastic measures to combat inflation by pushing interest rates to as high as 19%. It is now widely accepted that the breakdown of monetary discipline will lead to financial chaos with huge shocks to macroeconomic and financial stability. After the recent Global Financial Crisis, we have come to realise how important it is to maintain the appropriate monetary discipline. It has been argued by many economists that one of the contributing factors leading to the Crisis was that the US policy interest rate was set too low for a prolonged period, which further fuelled credit growth and the housing bubble in the US.
In Asia, efforts are underway to address these specific issues recognising that in this interconnected environment, the execution of remedial and containment measures will be highly complex and challenging. Focus is also being given to having enhanced surveillance and oversight that is complemented by a robust framework for governance, transparency and accountability. Given the strong presence of international institutions in the Asian region, we have strong interest in the establishment of an effective cross border resolution mechanism so that any failure of such large and systemically important institutions with cross border representations can be dealt with effectively in an orderly manner. This will require cooperation and coordination across countries, taking into consideration their differing regulatory and legal systems. A further priority in emerging Asia is the promotion of responsible market practices and consumer protection given the stage of development and level of financial literacy. There is significant scope for creating greater global momentum for improvements in regulatory standards on market practices. Much work still remains ahead and would require resolve and commitment in this reform agenda. The more inclusive global process is critical to this effort and should be further deepened to truly reflect the global dimension of the financial system in this 21st century. On the recent increasingly intense debate on the role of the exchange rate as the solution to the global imbalances, it needs to be recognised that the foreign exchange market is not like any other markets.

This phenomenon has been supported by the progressive financial liberalisation, the development of domestic financial markets, the greater use of domestic currency to facilitate bilateral trade activities and the development of the payments and settlement systems. The economic and financial regional integration has also been reinforced by a higher level of regional cooperation. Earlier regional cooperation had focused mainly on trade, investment and development. This decade has seen the cooperation shift to efforts to address financial stability issues, including in surveillance, crisis management, liquidity support arrangements, financial supervision and financial market development. The approach in forging greater financial integration in Asia will be different from that adopted by Europe. The region does not have centralised institutions to coordinate financial integration but has leveraged on the existing intra-regional groupings and networks to forge greater cooperation and collaboration in areas of common interest. The region has its own monetary and financial stability committee that is supported by arrangements for regional surveillance to identify risks and vulnerabilities to the region. Also in place is an integrated crisis management framework that will be operationalised in the event of an imminent financial crisis in the region. Recently the region successfully organised two schemes for reserve pooling, the Asian Bond Fund and the ASEAN+3 Chiang Mai Multilateralised Swap arrangement as a liquidity support facility.
However, in the interests of the Swiss economy as a whole, it is important that the negative interest rate be allowed to function as effectively as possible, by applying it broadly and keeping exceptions to a minimum. The aim of the negative interest rate is to reduce the relative attractiveness of Swiss franc investments, and to counter upward pressure on the exchange rate. Hence, it is primarily directed at the external contributions to monetary conditions in Switzerland. As such, the negative interest rate is not an ordinary policy instrument. It is a consequence of the fragile international environment and its exceptionally low interest rates. Historically, Swiss interest rates have been lower than those of our main trading partners. This interest rate differential is a reflection of our country’s long-standing strengths, including political stability, sound institutions, a resilient economy, and a first-class financial sector. My first chart shows the interest rates of German and Swiss ten-year government bonds. The orange area indicates the interest rate differential. As central banks around the world fought to mitigate the worst effects of the global financial crisis, short-term interest rates in many advanced economies fell towards zero. Importantly, foreign interest rates, including those in Germany, have fallen more sharply than those in Switzerland. As a result, Switzerland’s interest rate differential had practically disappeared, making Swiss franc investments more attractive than comparable investments in other currencies.

In the market for private sector bonds, interest rates fell as well, but not by as much as government bond yields, reflecting the greater substitution opportunities for corporate bond investors. While the introduction of the negative interest rate caused interest rates on the money and capital markets to decline, mortgage rates did not decrease to the same extent. Indeed, for long-term mortgages, interest rates are slightly higher than they were at the beginning of the year. This is because banks’ refinancing costs have not fallen to the same extent as money market interest rates. As a result, banks’ interest margins have come under pressure. 1 To partially offset this effect, banks have raised their mortgage interest rates. As yet, therefore, fears that the negative interest rate might contribute to stronger growth in mortgage lending have proved unfounded. 1  This affects the banks’ “liability margin”, which is the difference between the interest on maturity-matched alternative funding sources and the interest on deposits. BIS central bankers’ speeches  3  The Swiss economy in a difficult environment So far, I have spoken mainly about exchange rates and interest rates – that is, monetary conditions in the Swiss economy. I would now like to turn to the real economy. Switzerland is a relatively small open economy. 2 In general, this means that international developments matter a lot to Switzerland. However, during the global recession of 2009 and the sluggish recovery that followed, the Swiss economy proved to be surprisingly resilient.
That is probably not happenstance. It may jeopardise internal cohesion and besides making monetary policy decisions, we have to work together in running an organisation. Then there is the risk that a policy of openness inhibits the internal discussion. (That is the background to the published minutes not reporting exactly what each member said at the meeting.) A third problem and the one that has attracted most attention has to do with our external communication. Before commenting more on the third point, it is perhaps advisable to point out that these problems had already been recognised when the new system was launched. That I mention them here should not be taken to mean that they have caused concern since then. More personification The changes from the beginning of this year were prepared at the Riksbank last autumn. After contacts with the Bundesbank, the Bank of England and others, a structure was drafted for the communication of monetary policy. Eight to ten monetary policy meetings a year would be held at set times. Press notices and inflation reports in connection with these meetings would form the corpus of our joint communications. Divergent opinions would not be revealed before the minutes have been published some time after each meeting. 3  BIS Review 111/1999  This arrangement does impose some restrictions on the outspokenness of Board members.

The demand for trusted data will only grow as regulators strengthen reporting and disclosure requirements. Yet, the availability of good data remains a big challenge. The process of ESG data acquisition is manual, cumbersome and costly. There is also lack of transparency in the verification and reporting process. Technology can be a game changer in addressing these data challenges. First, the problem of data acquisition. FinTechs are offering solutions that connect directly via Application Programming Interfaces (APIs) to existing systems, such as waste management systems, to retrieve relevant environmental and energy consumption data more efficiently. Financial institutions are exploring the use of IoT devices and sensors to measure directly at source, carbon emissions, energy consumption, and pollution. Satellite imagery is being used to track the progress of reforestation and carbon sequestration projects, which enables nature-based solutions and offerings. Second, the problem of data provenance. Here, distributed ledger technology is being considered as a way to maintain provenance 1/3  BIS central bankers' speeches  and traceability in the data. For example, IBM’s Food Trust uses blockchain to connect participants across the food ecosystem, such as growers, processors and retailers, with data collected along the supply chain. This allows them to ensure that food safety protocols and sustainable food practices are adopted at each stage of the food chain. It also allows them to trace any food fraud incidents or food safety breaches back to their source.
And this is not primarily the result of an unusually long slowdown, as many have claimed. The preceding boom was also unusually long. Furthermore, we knew that there were large risks associated with the fiscal policies conducted in the initial years of the Monetary Union. The discussions on fiscal policy were occasionally rather acrimonious in the EFC, for example. Several of us gave clear warnings regarding the fiscal policies pursued by, for instance, France and Germany at the time. The Stability and Growth Pact obviously did not serve as the deterrent it was supposed to be, at least not sufficiently. Nor did EMU - so far anyway - contribute as much as we had hoped to making the European economy more efficient. Perhaps there are a few exceptions here related to the financial sector and the financial markets. It is my intention in this introductory remark to focus on some suggestions for the future. In doing this, I will talk about macroeconomic issues, rather than dealing with the severe structural challenges Europe is confronted with. However, before doing this let me make a general comment. In the present debate some conclude that the current policy framework should be relaxed, which is normally expressed as saying it should become more flexible. I have difficulty understanding this view. On the contrary, I think the developments in recent years have strengthened the arguments in favour of a regulatory framework. From the start there were concerns about “free riders”. These concerns were confirmed sooner than expected.

However, the banking system’s relative well-being does not mean that the banking sector resolution is over. Problems accumulated by banks turned out to be more significant than we expected. As I have mentioned, here belong sizeable loans to companies connected with banks’ owners. Not all of these companies are successful, and their projects remain unimplemented for years. Similar to owners, large creditors often use their funds deposited with banks to fund projects of their owners or chief executives, shifting all the risk to the banks. Complications in obtaining relevant information from a foreign jurisdiction by the supervisor allowed banks to accumulate sizeable assets abroad (loans to non-residents, large correspondent account balances with foreign banks, securities in foreign depositories, letters of credit and other transactions outside the RF jurisdiction). A detailed inspection reveals that most transactions with non-residents are of fiduciary nature, and a foreign company or bank is not the ultimate recipient of funds. As a result of such transactions, funds are ultimately used for loans to owners or fictitious increase in the bank’s capital. Currently, the supervision’s main objective is to timely reveal such fiduciary transactions which undermine financial stability of credit institutions. Today, we are completely rebuilding the whole system of bank supervision, accelerating supervisory decision-making, and, moreover, striving to enhance the proactive nature of the supervision.
new mountains that underline the importance of policymakers' capacity to climb up the top. In only two years, the world we knew has dramatically changed. The humankind has faced threats that seemed to be forgotten in the modern world, an unprecedented pandemic and a war in Europe, which are not only a human tragedy, but also supply shocks with significant economic costs that may profoundly reshape the world economy and geopolitical landscape. This environment creates many challenges for the macroeconomic policies, as well. 1/4  BIS - Central bankers' speeches  The pandemic was a shock of unprecedented nature causing global supply disruptions, supply demand mismatches, and exceptional patterns of economic behaviour. However, the policy response was of unprecedented nature and size, contributing to relatively swift and job-reach recovery. Thus, for example unlike GFC when it took seven years for the euro area GDP and almost twelve years for unemployment to return to its pre-crisis level, this time it took only one year to return to pre-crisis level and unemployment to hit record low. These developments are also relevant for some of the CESEE transition economies with strong trade and financial ties with the advanced Europe. This was a showcase of how a sizable and wellcoordinated monetary and fiscal mix can mitigate the adverse effects of a large exogenous shock. Unfortunately, while calibrating our exit strategies and reverting to a normal mode, another shock wave came pushing energy and food prices further up the curve, hence accelerating inflation while overshadowing growth recovery.

The slower catching up of the region is not a new phenomenon as it came on the surface right after the global financial crisis. Most of the post transition real convergence (around 60%) occurred in the 5-year period preceding the GFC, against the backdrop of the remarkably growth-conducive global context, rising globalisation and trade integration, as well as favourable terms of financing. Afterwards the convergence slowed down, and it took twelve years since 2008 up to the pandemic to achieve the pace pertinent for the five years pre GFC period. Now, with the global environment becoming highly uncertain, risk of deglobalisation and supply chains defragmentation becoming more certain, and tightening of the global financial conditions already in place, faster real convergence seems even more complex issue. In this vein, there are estimates that crisis has adversely affected growth potential of the CESEE region with average decline of 0.7 pp in 2020. 3/4  BIS - Central bankers' speeches  What are the main structural hurdles that prevent lifting of the growth potential and resilience? Growth accounting framework reveals that in the last decade the slowdown was mostly through the total factor productivity, while the growth in the region became more reliant on capital accumulation. Given the wide capital stock gaps compared to the more advanced countries, the accumulation of capital is warranted, and preferable way to grow. Yet, the fact that the other sources of growth seem to be muted, gives ground for concerns.
This is partly because of the conflict in Ukraine and the remaining questions regarding European banks’ balance sheets. The public finance situation is not entirely clear in all of the countries either. But once this uncertainty has calmed, developments in the euro area may also pick up, as we are expecting that monetary policy will remain very expansionary, fiscal policy will ease and credit granting will function better. The currently weak development in the euro area is of course also leaving its mark on the Swedish economy. The development of exports is weak, which is in turn holding back investment. Exports will not pick up again until economic activity abroad strengthens and it may take a year or so before export growth returns to a normal rate. But then investment is also likely to pick up as interest rates are low and the funding opportunities are good. Demand from our most important trading partners is currently fairly weak, therefore, and this has contributed to dampening growth in Sweden. On the other hand, demand from Swedish households has developed positively. In recent years, household incomes have increased at a good pace and consumption and housing investment have shown strong development. Since our previous forecast at the beginning of September, new revised GDP statistics for the second quarter showed a somewhat higher GDP and a somewhat stronger development in consumption and investment than we had reason to expect, given the preliminary statistics.

19  The service evaluation methodology used in the research conducted by the European Commission consists in the creation of a five-grade scale used to define the level of services provided: LEVEL 0 — no website available to the public or inability to assign an existing website to any of the levels 1–4 (0%-24% on the chart); LEVEL 1 — INFORMATION — the information necessary to launch the use of a given public service is available online (25%-49% on the chart); LEVEL 2 — ONE-WAY INTERACTION — a website available to the public offers the ability to download a form that, after it has been completed on paper, can be used to launch the use of a given public service (50%-74% on the chart); LEVEL 3 — TWO-WAY INTERACTION — a website available to the public offers the ability to launch the use of a given public service by completing and sending an electronic form. Therefore, authorization of the person intending to use the service is necessary (75%-99% on the chart); LEVEL 4 — FULL ELECTRONIC CASE SETTLEMENT — a website available to the public offers an entire public service online, including the stage of decision-making and the delivery thereof. No other paper procedures are necessary (100% on the chart). More information is available in Online Availability of Public Services: How is Europe Progressing?. Web Based Survey on Electronic Public Services. Report of the Fifth Measurement,” Capgemini for European Commission, October 2004.