samchain/econo-pairs-v1 huggingface dataset:
Their main concern is a perceived lack of diversification to ensure that the senior tranche can be indeed as safe as claimed because correlations among several countries’ debt could increase in a stressful situation (as occurred during the financial crisis). Also, it may be difficult to sell the junior tranche at coupons that do not fatally compromise the overall economics of the synthetic security issuance. Indeed, if the junior tranche had to be placed at a relatively high coupon, then the senior tranche would need to offer a lower coupon than Bunds, a doubtful selling prospect. This would likely render the economics of the SBBS as unviable, which would be very unfortunate. These obstacles could be overcome if, for instance, a small first loss tranche were to be covered by public guarantee, jointly provided by member states. Such contingent liability could be limited to a reasonable level. The success of the synthetic European Bonds would have significant benefits for financial integration and for the banking and capital markets unions. Alternatively, a European entity could issue e-bonds as a pure securitisation of sizable amounts of national sovereign bonds but with a preferred creditor status over national sovereign bonds. Such a structure would be less efficient and could increase the cost of issuing the nonpreferential part of national debt that is not included in the securitisation. However, this could even act as a disciplining device and would not necessarily imply an increase in the costs of the total debt issuance. The amounts achieved could nevertheless be considerable.

To conclude I would like to stress more particularly five points. First, on the economic underpinnings, the main strategic goal of the Eurozone as well as of the European Union as a whole should be to increase substantially our growth potential. This is crucial and calls upon increasing very significantly in particular our rate of employment, our labour productivity progress and our technological and scientific basis. Second, as regards methodology, it is clear that we have to work out an appropriate concept for the actual, precise, to the point implementation of the reforms. The Lisbon agenda is excellent in terms of diagnosis. It is not associated with a precise and efficient decision making process, with a powerful delivery concept, which is absolutely indispensable. I was very encouraged to hear clearly Mr Mc Creevy stressing to the Governing Council of the ECB that the Irish Presidency will put the Lisbon agenda implementation on top of its priorities. The ECB will very warmly back initiatives of the Presidency in that domain. It is urgent. Third, as regards prioritization of structural reforms, I would personally particularly mention four points which seem to me of utmost importance in the Eurozone: Youth unemployment which is attaining unacceptable levels in some economies; unsatisfactory functioning of the Single Market in the service sector; insufficient labour productivity progress in the economy as a whole; and, lastly, consequences to be drawn from ageing in the management of the social protection schemes.
On the second meaning of “faith” in the sense of a justified belief, a well-founded expectation, I believe there are good reason to trust independent central banks with the maintenance of price stability. Finally, trust can be regarded as a stock of capital or “credit” that is built up in the relationship between the central bank and its ultimate master, the public it serves. Such a stock of trust is the basis for keeping faith also in difficult times. Trust flows in both directions and - like stable money - it is a common good. Trust breeds more trust in return. But the building of trust in a relationship requires some time and patience. I believe that the European Central Bank can take credit and, indeed, pride in achieving its mandate so far. Its mandate is the maintenance of price stability in the euro area over the medium term. Nothing more and nothing less. There can be no doubt that the European Central Bank is determined and committed to continue to fulfil its responsibility and keep the promise of a stable currency for Europe. Should we fail in the pursuit of this task the statutes of the European Central Bank may not foresee any immediate sanctions or material punishment. As mentioned before I would not regard such sanctions as either necessary or effective. However, central bankers may well take fright from a glance at Dante’s Divina Comedia. There a certain Adam of Brescia is mentioned, guilty of the crime of falsifying coins - i.e.

Gent Sejko: Modernisation of retail payment systems in Albania Welcome address by Mr Gent Sejko, Governor of the Bank of Albania, at the Conference on the "Modernisation of retail payment systems in Albania", Tirana, 21 June 2018. * * * Dear Deputy Prime Minister Dear media representatives, Dear participants and colleagues, Welcome to this conference, whose topic, I would say, is a challenge and promotes the modernisation of the retail payments in Albania. The Bank of Albania has constantly noted in its communications that the safe and efficient development of payment systems is a key objective not only to support monetary policy implementation and safeguard financial stability, but also to serve as an important tool for formalised and sustainable economic development. In addition to the focus on payment systems – as a fundamental pillar for the functioning of financial markets and the economy in general – the Bank of Albania is paying increasingly more attention to their development from the perspective of financial inclusion. The main goal in this regard is the broad use of payment instruments in the everyday life of citizens. This new way of development aims to identify and satisfy the needs of the smallest component of the economy – households and enterprises.
That would afford us better knowledge of the relations between subsidiaries and their parent companies, which are so important for understanding the effects of globalisation. Moreover, the ESCB has contributed to the creation of a worldwide network to set up a global identifier for legal entities, the Legal Entity Identifier (or LEI). In Spain, some institutions, including INE and the Banco de España, are promoting the use of the LEI and facilitating its implementation in our country. I think there is a broad consensus that the widespread use of the LEI among institutions and firms globally would greatly favour the monitoring of financial stability and the compilation of statistics. Globalisation also poses significant challenges for the compilation of macroeconomic statistics, on which our institutions cooperate very closely. Multinational enterprises (MNEs) organise their activity and finances globally and the complexity of allocating them correctly across countries can only be afforded by data-sharing –nationally and internationally- and perhaps even by resorting to centralised data reporting and quality checking. Obtaining information from MNEs as groups would allow reporting to be simplified, while at the same time ensuring a consistent cross-country recording of transactions, assets and liabilities. I have mentioned before how important it is for official statistics to offer a complete and consistent picture of the whole economic situation. In this regard, it is crucial that users know the links between the different products, even when they are produced by different institutions. And this is something which should hold not only for aggregates but also for micro data.

And, for our part, we need to: •  improve our communications with firms, including being more timely and clearer in our feedback;  •  improve collaboration with home and other host supervisors; and,  •  make supervisory colleges more effective, by promoting more robust discussions and more direct feedback to firms. Thank you for your attention today. I look forward to continuing to work with you on these issues as we seek to enhance our supervisory programs. BIS central bankers’ speeches  5
There are also signs that employment is rising in education, the public sector and health and social services, from the weak levels recorded in the first six months of last year. Manufacturing employment remained well below the level one year earlier in the fourth quarter of 2003, but is falling at a slower pace. Unemployment has been fairly stable. Adjusted for seasonal variations, LFS  4  BIS Review 16/2004  unemployment stood at 4.6 per cent of the labour force as measured by Statistics Norway’s Labour Force Survey (LFS) in the fourth quarter of 2003. Growth in household demand, petroleum investment and increased activity in the business sector are paving the way for a rise in employment in the period ahead. On the other hand, intensified competition and continued rationalisation in the business sector may have a dampening impact on labour demand. This year, employment growth is expected to be fairly moderate even if there is a sharp rise in output. Only a slight decrease in unemployment is projected for 2004. Unemployment is projected to edge down in 2005 and 2006. After several years of high wage growth, pay increases in last year’s settlement were more moderate. Annual wage growth was nonetheless 4½% as substantial increases with effect from 2003 were awarded in the 2002 main wage settlement. Wage growth is projected to decline to 3¾% this year. The labour market appears to be improving somewhat more rapidly than expected previously. In isolation, this may contribute to pushing up wage growth relative to previous projections.

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Along with extraordinary measures taken to withstand the crisis effects in the short run, authorities of advanced economies and international financial institutions have been strongly committed to change the way of global financial system functioning and its regulating superstructure. Many financial market regulation and supervision standards are expected to change, aiming at putting necessary boundaries to financial market dynamism and innovations, in order to ensure system’s stability and its resilience to various risks. In more details, the goals of these changes will be: strengthen the mechanisms that raise financial system stability; duly orient the stimuli that determine decision-making in the financial activity and decrease procyclicality in it. Changes to the regulatory and supervisory superstructure are aimed at strengthening the institutional mechanism, paying greater attention to systemic risks and global-wide financial institutions. Better conditions will be set for supervisory standards convergence and the cooperation among regulatory authorities operating in different jurisdictions will be strengthened. At the same time, the role of international financial institutions will be oriented towards financial crisis management and their resources will be adapted to this end. 2  BIS Review 129/2009  For many reasons, which converge in ongoing processes of financial integration and economic globalization, no country can pretend to stand beyond these developments.

15  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  15  Annex 1: Charts Chart 1: The Great Moderation in the United Kingdom  Chart 2: G7 debt increased before the financial crisis  Source: IMF data and Bank calculations  16  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  16  Chart 3: Risk of holding mortgage-backed securities perceived to be low; until it wasn’t  Source: UK AAA-rated residential mortgage-backed securities – 5 years spread to swap  Chart 4: Shadow banking has transformed into resilient market-based finance  Source: FSB Global Shadow Banking Monitoring Report * FSB asset management recommendations and MMF reforms (notably EU, US) ** Securitisation reforms, Market intermediation reforms  17  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  17  Chart 5: China’s credit boom in a historical context  Source: BIS data and Bank of England calculations  Chart 6: Markets no longer rely on government support  Source: Moodys and Bank calculations  18  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  18  Chart 7: Our 2017 stress test showed that UK banks could withstand severe UK and world recessions and a market crash  19  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  19
Spencer Dale: QE – one year on Speech by Mr Spencer Dale, Executive Director and Chief Economist of the Bank of England, at the Centre for International Macroeconomics and Finance (CIMF) and Money Macro and Finance (MMF) Research Group Conference “New Instruments of Monetary Policy: The Challenges”, Cambridge, 12 March 2010. *  *  *  I would like to thank Rohan Churm, Chris Kubelec, James Smith and Jing Yang for their considerable help in preparing these remarks. The views expressed are my own and do not necessarily reflect those of other members of the Monetary Policy Committee. Introduction This has been a truly extraordinary year for our economy and for economic policy. A year ago – almost to this very day – the Monetary Policy Committee (MPC) conducted its first gilt auction as part of its asset purchase programme or its policy of quantitative easing as it became known. The need for policy action was clear. The three months to March 2009 are estimated to have seen the sharpest quarterly contraction in GDP since comparable records began in the 1950s. Manufacturing output was contracting at an annualised rate of close to 20%. Claimant count unemployment was rising at the fastest rate on record. And financial markets remained in a state of shock.

The crucial insight emphasised by these models is that expectations matter, and provide a mechanism through which policy makers can seek to influence activity at the zero bound. This is an important channel of monetary transmission and one I will return to. But the argument that monetary policy can work only through expectations management is not a robust result. It rests on very particular assumptions. In this class of models, financial markets are assumed to be complete and frictionless and the representative agent is able to arbitrage across all financial markets. As such, all non-aggregate risk in the economy can be hedged perfectly and asset prices depend only on state-contingent payoffs. Under these assumptions, demand curves for financial assets are perfectly elastic. But in the real world it seems plausible that demand curves for assets, in addition to money, are downward sloping to some degree, in which case changes in their relative supplies can affect their relative prices. It is this which gives quantitative easing its traction. Half a century ago Tobin (1958), in pioneering work on portfolio allocation, recognised that a range of assets, in addition to money, are likely to be imperfect substitutes. But Tobin did not articulate fully the frictions that could generate such imperfect substitutability. More recently, there has been rapid development in micro models of the source of financial frictions which can motivate imperfect substitutability. Recent examples include Brunnermeier and Pedersen (2009) and Vayanos and Weill (2008).
François Villeroy de Galhau: The tale of the three stabilities: price stability, financial stability and economic stability Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Financial Stability Review Conference, 3 March 2021. * * * It is a great pleasure for me to welcome you to the publication today of the 24th edition of the Banque de France Financial Stability Review. We have a set of very distinguished speakers. I would like to thank them and all the contributors to the review, as well as the Banque de France’s teams who helped prepare this issue, which focuses on macroprudential policy in the midst of the Covid crisis. The past twelve months have seen some of the most dramatic events since World War II, with this unprecedented pandemic. For this reason, and given that today is about the Financial Stability Review, I will focus on the concept of stability itself. Other sources of instability have affected the world economy in the past decade or so: the Global Financial Crisis and ensuing recession, the European Debt Crisis, or more recently rising trade tensions. It seems that the world has become more unstable. Against this backdrop, stability is all the more important for our fellow citizens, and it has different dimensions, but I will focus mainly on three key aspects. I will start (and it will be a surprise to no one) with price stability.

One natural question raised by that episode, though, is whether the need for such a large scale intervention could be avoided by addressing the structural causes of the “dash for cash”, and if not whether central banks should have facilities to provide the necessary liquidity to the financial system more efficiently. Those are topics that I don’t have time to get into in detail today but they are hugely important questions for central banks and ones with which the FPC is actively engaging.12 In the meantime the MPC has made clear that it stands ready to respond to any re-emergence of market dysfunction, and so avoid any associated tightening in monetary and financial conditions, as appropriate. b. Forward guidance – a high bar to tightening The second tool I want to consider is forward guidance – in other words future commitments on interest rates and other policy tools. Like QE, forward guidance is a tool the MPC had used several times before this crisis. In its 2013 review of the MPC remit, HM Treasury explicitly clarified that the Committee had the ability to deploy forward guidance as a policy tool, including where appropriate making it conditional on future developments.
But, it is a very useful tool, because on their own, risk-based measures can be arbitraged too by claiming that the measured risk has fallen when the real risk has not. The leverage ratio helps to put a floor into the system which stops that type of activity beyond a certain point. Does this approach of using several tools leave the whole system of regulation too complicated? It certainly puts an emphasis on having good people in regulation, but I come back to the quote of the late 1980s, namely that good regulation has to understand how firms take risks. That does not, however, mean that a supervisor should allow a free-for-all and then (usually vainly) hope to understand it. We are doing a number of important things to counter complexity. First, the proposal on ringfencing from the Independent Commission has a strong element of separating more straightforward activities from the more complex. It should not be a matter of rules and good behaviour inside the ringfence and the Wild West outside, because the outside could damage the financial system, but we will be able to use different approaches on each. Second, the Prudential Regulation Authority will be very focused in its judgements on the things that matter for our objectives. For me, this is where simplicity is key – keep it very focused, but to do that we must have good people who can see the wood for the trees. That is what we are developing for the PRA.

Rather, as JFK once said, “the time to repair the roof is when the sun is shining”. By setting the CCyB rate above zero now, we lock in existing excess capital at a time it is relatively cheap (in good times, retain earnings is the main driver of capital increase and the impact of a higher capital requirement on credit and the economy at large is limited is the current circumstances) to be able to absorb futures losses and loosen the regulatory requirement at a time capital is scarcer and the macroeconomic impact of a gap would be significant. 3/4  BIS central bankers' speeches  A number of European countries have taken similar steps to increase their room for manoeuver ahead of a possible future storm. In that context, macroprudential policy is often described as a complement to monetary policy: a policy necessary to remedy the financial stability consequences of very accommodative monetary policy. I would have a more encompassing perspective: macroprudential policy is a complement to monetary policy both today and in the future: by contributing addressing financial buoyancy, it enables monetary policy to be relatively more accommodative today – but the preventive reach of macroprudential policy should not be overestimated, especially while macroprudential authorities are still relatively young and the policy toolkit less sophisticated than that of other policies; more significantly, by building up (macro)prudential room for manoeuvre ahead of the next storm, it also helps restoring monetary room for manoeuvre to address adverse developments.
Looking through the blip in the first quarter, the economy has now been growing above trend for a year and unemployment has fallen sharply over the past two. Consumer confidence is around its highest level for over a decade. Businesses investment intentions are solid. Momentum in the housing market is showing signs of returning. 23 Survey data point to continued momentum in real activity over the remainder of this year. 22  Based on average quarterly GDP growth since 1993. 23  The impact of Buy to Let changes will be examined in August Inflation Report. 8  BIS central bankers’ speeches  To be sure, the international risks to the growth outlook remain. The situation in Greece is fluid, and the on-going slowdown in China could prove more significant. But on balance we can expect the global economy to proceed at a solid, not spectacular, pace. 24 Second, domestic costs need to continue to firm. After a period of particularly weak wage growth, which reflected a marked expansion in labour supply that is now largely absorbed, wage growth is picking up. 25 The recent growth in wages has been stronger than we had expected in May, though most of the upside news was in bonuses, which are a less reliable guide to firms’ future labour costs.

BIS central bankers’ speeches  1  The political background is one of nearly constant conflict both within the dysfunctional “English” monarchical family, as well as with France over control of Normandy and the rest of Henry II’s continental empire. 1 The England of the 1200s was far from a unitary state. Most matters were administered by local barons, with the King acting as an arbiter in the event of a dispute. The relationship between local (baronial) and central (monarchical) authority was much less deferential, and much more arms-length, than it is today. Indeed, the early Plantagenet Kings of England spent most of their time living at home in Normandy or Anjou, allowing the English barons a considerable degree of autonomy. It was only after King John lost Normandy to the French in 1204 that the King resided full-time in England, breathing down the necks of the barons, who did not much like the closer observation of their activities, and the eyeing of their stockpiles of silver that this proximity entailed. The relationship between the barons and King John broke down in part because of unsustainable public finances, with John imposing an intolerably heavy and arbitrary tax burden in order to pay for royal extravagance, infighting, and wars with the French. The royal judicial system, whose tendrils extended ever deeper into the barons’ lives, was used to extort cash and as an instrument of royal control, rather than to ensure “justice”. What lay behind such unsustainable public finances?