samchain/econo-pairs-v1 huggingface dataset:
Indeed, anecdotal reports suggest that consumer spending during the month of February was adversely affected by the increase in taxes. Third, while we avoided the full fiscal cliff back in early January, there remain several vexing fiscal policy issues on the immediate horizon that, depending on how they are resolved, could adversely affect the economy. Indeed, at this time it looks like the sequester will go into effect on March 1. If it remains in effect for the full year, estimates from forecasters suggest that the sequester could reduce projected real GDP growth for 2013 by about ½ percentage point, which would be on top of the ¾ to 1 percentage point drag coming from already-implemented fiscal policy actions. Presentations on household debt and credit Our special topic today is household debt and credit. Over the last several years, researchers at the New York Fed have put considerable effort into improving public understanding of consumer debt and credit conditions. Consumer debts occupy the intersection of Main and Wall Streets, and are thus of great interest to the public. In addition, of course, by most accounts the financial crisis grew out of the mortgage market – the largest and most important form of consumer debt. So to better inform the public and policymakers, New York Fed economists have developed a series of quarterly reports and topical studies on consumer debts. We will have two presentations.

Failure would suggest a degree of political dysfunction that could undermine U.S. economic leadership and could encourage global corporations and investors to invest elsewhere. Make no mistake: Credible fiscal consolidation will not be painless, no matter what form it takes. The burden will be felt across many sectors of the economy and we must expect that the resulting fiscal drag will exert some restraint on economic growth. Nevertheless, there is no reason why a carefully crafted plan would need to put the economic recovery at risk. A credible plan, after all, would likely have very positive effects on confidence. In particular, I believe that business investment would respond positively to a credible plan. More generally, reducing uncertainty over future tax rates, entitlements and other spending programs has to be a positive development in terms of reducing uncertainty that can constrain economic activity. By clarifying the rules of the road, a credible fiscal plan is likely to reduce the incentive of households and businesses to delay spending and investment. This would likely offset fiscal drag to a meaningful degree. 6  BIS central bankers’ speeches  Conclusion To sum up, while it is still too early for a precise estimate of the economic impact of Sandy, I expect a negative impact on fourth quarter national and regional economic growth, but a minimal long run effect nationally and regionally. This has happened during a period where too many people remain without the jobs that they need to help support their families and themselves.
The cyclical dimension of systemic risk captures the procyclicality of financial agents’ behaviour which, if left unchecked, can amplify the financial cycle and increase its instability – a classical collective action problem. Historical evidence shows that the risk of such instability is particularly elevated in situations that combine rising residential prices and dynamic credit growth.1 Regulators and policymakers around the world have been working hard on regulatory measures that aim directly at containing these risks. The Lehman anniversary and the papers that have been discussed here this afternoon make this conference a good occasion to reflect on these efforts. In particular, I want to talk about the progress we have made here in Switzerland in devising and implementing regulatory answers to mitigating systemic risk, and also about the work we still have ahead of us in this regard. I will address these two issues in turn. For a start, let me give you a quick overview of the global reform agenda. On the global scale, the regulatory reform approach (Basel III) sets minimum capital adequacy requirements that are more stringent in both quantitative and qualitative terms, and introduces a global minimum standard on liquidity buffers. At the same time, importantly, the new framework takes explicit account of systemic risk. First, it imposes a capital surcharge for systemically important institutions in order to address the structural TBTF problem.

We embarked on this voyage in the late 1990s because we realized that the original 1988 Basel Accord had been overtaken by advances in the financial sector – and in the broader economy. While the 1988 Accord represented an important advance, new technology, the globalization of financial markets, and innovative financial products and services have changed the way that banks monitor and manage credit, market, and operational risks in a manner that the 1988 Accord could not anticipate and does not address. •  To ensure that the New Accord remains flexible, forward-looking, and appropriate for the risks and capital needs of internationally active banks of the twenty-first century, the Basel Committee established several goals for its work, goals that the industry has embraced. BIS Review 61/2002  1  G  First, we intended to develop a framework that encompasses the "three pillars" necessary to support an effective system of regulatory capital: the appropriate measurement and minimum requirements, supervisory review, and market discipline. G  Second, we wanted to align the minimum requirements more closely with the actual underlying economic risks to which banks are exposed, which should help allocate capital resources effectively. G  A third goal was to encourage banks to refine their measurement and management of risk over time. By creating incentives in the New Accord for banks to re-evaluate and enhance their tools constantly, we expect that banks themselves will adopt a forward-looking perspective on risk.
Denis Beau: The industry of confidence - how to build the financial sector of tomorrow Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the FINTECH R:EVOLUTION 2021, Paris, 14 October 2021. * * * Ladies and Gentlemen, First of all, I would like to thank France Fintech and its chairman Alain Clot for inviting me to take part once again in this major annual meeting of the French fintech industry: Fintech R:evolution. At the Banque de France and the ACPR, we believe it is essential to maintain a sustained and high-level dialogue with all the innovative players in the French financial sector and, more importantly, to contribute, in our own right, to the vitality of the French fintech ecosystem. It is therefore with satisfaction that I observe, year after year, the strengthening of the ties and trust between the Banque de France and France Fintech. After the partnership concluded two years ago, the year 2021 marks a new step since we are co-organising this week dedicated to fintechs, the French Fintech Week. I see this as a concrete illustration of "team spirit", which is an asset of the French financial centre and which I believe should be maintained and developed. With this in mind, I would like to share with you some observations on the ongoing transformation of the financial landscape, on its consequences for our role as central bank and supervisor, and finally on the challenges that we must not miss collectively. 1.

The risks multiply. What can one do about this? You can, of course, opt for the easy approach. You can continue to maintain tight controls and resist liberalization. But this will hinder the development of your domestic financial markets, and also the skill of the people involved, both the regulators and the commercial banks themselves. In my opinion, the right approach is for the emerging market to create, or improve and maintain the right fundamentals. In a way, instead of trying to extend your breakwater further and further, it is better to change from the less stable rowing boat to a more sturdy and seaworthy ship, one that can handle the rough ocean better. In this respect, there are three things that I wish to highlight. The first is the need to ensure that the country conducts proper macroeconomic policy. I mention this even though it is not directly the job of supervisors because it can overwhelm everything. To take the example of Thailand, we used the fixed exchange regime for too long, but without the domestic flexibility to adjust wages and prices to correct lack of competitiveness. We therefore could not maintain the parity for long. It also led to distortion in risk perception that led to excessive foreign exchange risk mismatch, over investment in the non-traded sector and damaging speculation, especially in real estate.
As Hong Kong has to import almost all the raw materials and equipment, devaluation of the currency does not mean that the export prices would necessarily be lowered by the same extent of the devaluation. As you know better than I do, although price is always important, competitiveness does not depend on price alone, whether or not you are talking about manufactured goods or services. Competitiveness depends on a host of factors, including better cost control, innovation, entrepreneurship, marketing and constant striving to achieve productivity gains. In this context, I cannot help tell an old, but true, story involving a conversation with an American friend 6 or 7 years ago, when the $ was depreciating and the DM and the Yen surging to new highs. He was complaining that many countries, including the Southeast Asian economies, were manipulating their exchange rates to gain trade competitiveness. As a result, American goods were having a hard time selling overseas because they were too expensive. I told him that, while it may or may not be true that some countries were deliberately keeping their exchange rates low, the apparent difficulty experienced by US manufacturers to penetrate the Asian markets was not caused by pricing alone. For example, how could the Americans expect to sell their refrigerators to Hong Kong households if most of the refrigerators they tried to sell were almost as big as the kitchen of an average flat here in Hong Kong?

Again I quote these figures to illustrate the point that even under a floating rate regime, as in the case of Singapore, domestic interest rates can still go up sharply in the event of external shocks. It will be wrong to assume that interest rates will remain stable if Hong Kong were under a floating rate regime when external shocks occur. 5. While a floating rate regime will not insulate Hong Kong from possible interest rate hikes and asset market corrections when external shocks occur, to abandon the link now will have even more devastating results. According to the analysis conducted by one of the major banks in Hong Kong, a switch to a floating rate regime would lead to a sharp rise in inflation, to a double digit figure, and a sharp fall in GDP growth for 1998. Moreover, the uncertainty and disturbance caused by the change will undermine public confidence in Hong Kong’s monetary system, which may bring irreparable damage to Hong Kong’s position as the leading international financial centre in the region. In short, the price and pain for switching to a floating rate regime will be even higher. 6. Clearly I appreciate that Hong Kong’s manufacturers will be facing strong competition from our neighboring economies whose currencies have depreciated sharply in recent months. However, competitive devaluation is not and cannot be our answer to the problem. While attractive superficially, competitive devaluation is a risky and counterproductive approach.
The increase in private debt is a logical response to the new setting of lower interest rates in the Spanish economy, but it has also increased the exposure of this sector to potential adversities. As the expansionary effects of this process of adaptation by our economy to the new environment ease off, progress towards real convergence at similar rates to those at present will require that growth be underpinned by more stable factors. Main challenges facing the Spanish economy This overall positive assessment of the Spanish economy, even during the recent slowdown, should nonetheless not conceal the presence of certain rather unsatisfactory aspects. These include the positive gap with the euro area in terms of price and cost growth, the flatness of investment in capital goods and low productivity gains. To further real convergence, these problems must be overcome. In this connection, economic policy action should be geared primarily to promoting competitiveness, in the broadest sense of the term, where aspects linked to the behaviour of prices and costs combine with others related to growth potential. Regarding the behaviour of prices, and despite the substantial progress made towards nominal stability since the mid-nineties, the persistence of an inflation differential with the euro area poses risks in respect of future competitiveness. The wage restraint characterising the most recent phase of the Spanish economy has passed through unevenly to the sectors exposed to competition and those sheltered from it.

The new rules contain sufficient flexibility to deal with exceptional situations where public money may be required to ensure financial stability. Second, public risk sharing. A certain level of public risk sharing is necessary to create confidence in the overall financial system. Even wellcapitalised banks can fall victim to runs and contagion. This is why central banks act as lender of last resort and fiscal backstops should be in place to ensure trust in the stability of the financial sector. In the Banking Union, both supervisory responsibility and the fiscal backstop need to be at European level, to underpin durably confidence in the area-wide financial system. Just as necessary is the establishment of a European Deposit Insurance System (EDIS). The current situation, where supervision is common, but the consequences of potential bank failures are still predominantly national, should not last. In such an incomplete framework, national considerations inevitably continue to affect supervisory decisions. This is not without consequences for the incentives for banks to become more European. Concrete examples include a lack of fungibility of liquidity or capital. The fact that the euro area is not considered as a single jurisdiction may result in applying higher capital buffers to euro area G-SIBs. While the institutional underpinnings of the Banking Union do not yet meet the requirements of a genuine single financial market, the creation of the SSM has been a leap forward in the establishment of a coherent regulatory framework.
Before you reach for your telephones, let me stress that we have no intention of trying this out. Monetary affairs are, as I have said, unpredictable, and the direction and magnitude in the movement of the Hong Kong dollar exchange rate, if it were allowed to float, is anyone's guess and may not have any bearing on the underlying economic fundamentals. We have no wish to find out. And, in answer to the many dramatic statements made over the past couple of weeks or so, our somewhat relaxed attitude towards small deviations in the exchange rate on the strong side of 7.80 does not mean that we are any less committed to maintaining the Link. Minor fluctuations in the market exchange rate on the strong side of the Link are a feature of our monetary system, and they are nothing to get too excited about. And there is an effective mechanism for us to ensure that these fluctuations are not so large as to undermine credibility and confidence in the Link. It is, however, worth putting into perspective some of the reasons for the sudden strengthening of the Hong Kong dollar, because they have a significance that goes beyond short-term fluctuations in the market. The trigger, you may recall, was the political pressure from outside for a revaluation of the renminbi. The read-across to the Hong Kong dollar, combined with a realisation that the Hong Kong economy was not doing so badly after all, led to a scramble to cover short positions.

The latter is the responsibility of the Monetary Authority, who (to quote from the Exchange of Letters) shall "on his own be responsible for achieving the monetary policy objective, including determining the strategy, instrument and operational means for doing so." An accompanying letter from the Financial Secretary to the Monetary Authority  BIS Review 44/2003  5  specifies in black and white, for the first time, the monetary policy objective and the structure of the monetary system for Hong Kong. In fact, this accompanying letter does nothing more than describe the existing arrangements, which have been transparently clear to all of us for the past 20 years. Nevertheless, the clarity with which this objective is now expressed, and the responsibility now formally given by the Financial Secretary to me, as Monetary Authority, to achieve independently this monetary policy objective have important things to say about the operational independence - and accountability - of the HKMA. The second aspect of this Exchange of Letters is, in my view, even more important. This involves the disclosure, for the first time, of the details of the delegation of statutory powers from the Financial Secretary to the Monetary Authority to enable the Monetary Authority to discharge independently his functions and responsibilities. In making this disclosure, the Financial Secretary commits himself to explaining publicly, within three months, subject to considerations of market sensitivity, any decision by him to override or bypass the Monetary Authority in the exercise of these delegated powers.
Fourth, on asset bubbles and the linked exchange rate system: the monetary policy objective of Hong Kong is exchange rate stability, rather than to target asset prices or inflation. Asset bubbles are not unique to economies with fixed exchange rates. Economies with floating exchange rates experience similar problems. In any case, it is difficult to tell ex ante whether there is an asset bubble. On the other hand, most research studies find that monetary policy is too imprecise and blunt to be used as a tool for targeting asset prices. Fifth, on the Hong Kong dollar being undervalued: there is no evidence. Recent empirical research by the HKMA and the IMF show that there is no evidence of currency misalignment for the Hong Kong dollar at present. Given the flexible and adaptive nature of the Hong Kong economy, wages, prices and other economic variables would adjust so that any misalignment in the real effective exchange rate would be corrected. Even a flexible exchange rate is not immune to sustained currency misalignment. Exchange rate  BIS Review 139/2007  5  movements are affected not only by economic fundamentals but also by market dynamics. A flexible exchange rate is arguably more prone to currency misalignment, particularly for small and open economies which are more vulnerable to changes in capital flows. Sixth, on widening the exchange rate band: the simple answer is no. It would only serve to undermine the credibility of the linked exchange rate system and invite speculation on the likelihood of further band-widening.

In December 1999 fixed rate loans accounted for 34% of term lending compared with just 28% in December 1996. Fixed rate loans provide SMEs with greater certainty of expenditure streams, assisting business planning and enabling businesses to operate in a more certain financial environment. UK small businesses have also increased their use of non-bank forms of finance, such as factoring, leasing and, more recently, equity finance. A recent survey showed that a higher proportion of SMEs used asset based finance in the UK than in any other EU country except Ireland. This trend, to move away from the reliance on short-term overdraft financing that prevailed in the early 1990s, towards a wider variety of types and sources of finance, is to be especially welcomed. It is widely acknowledged, however, that rapidly growing businesses require equity as well as debt finance. The formal venture capital industry often finds it difficult to help at the very small end. That makes it all the more important to develop the informal venture capital market, including the considerable potential contribution of business angels. In addition to their ability to inject smaller amounts than are viable for formal venture capital firms, business angels are also able to provide considerable technical expertise and general management advice. Estimates from Mason and Harrison suggest that business angels already invest £ million per year: true, it’s a long way below the US but it’s a significant contribution and one that should be encouraged.
Although the euro will only become available in the tangible form of banknotes and coins in over two years’ time, there is already a feeling that the euro is accepted by the majority of the population and that the benefits of the euro are appreciated. The euro, as you in Switzerland are particularly well placed to observe, is playing an increasingly important role not only within the euro area, but also beyond it. Monetary policy with a view to price stability European Economic and Monetary Union is a great opportunity to achieve the objective of sustained and widespread price stability in Europe. Monetary stability is the best contribution that monetary policy can make to lasting economic and employment growth. Stable prices promote the efficient allocation of scarce resources and also help to guide expectations. 1  BIS Review 99/1999  For these sound reasons, the Treaty establishing the European Community specifies the maintenance of price stability as the primary objective of the European System of Central Banks (ESCB) and therefore of the Eurosystem. The Governing Council of the ECB does its utmost to fulfil this function. In this respect, it endeavours to communicate its monetary policy to the public in a comprehensible manner. In particular, the Governing Council of the ECB has published a quantitative definition of its primary objective of price stability. This helps provide economic agents with clear guidance on expectations of future price developments.

Whilst in Switzerland disturbances affecting, in particular, the demand for central bank money “for reasons still unknown” have increased in recent years, the ECB faces additional uncertainties at the beginning of Monetary Union in terms of the effects of the shift of regime to a single monetary policy in Europe. It is difficult to assess whether conventional and reliable macroeconomic relationships are changing as a result of the introduction of the euro. In view of these uncertainties, but also in general, it is unwise to rely on a few indicators or only one when making monetary policy decisions. Indeed, to date our studies have  BIS Review 99/1999  2  revealed that the M3 monetary aggregate shows clear signs of stability and healthy indicator properties. This provides a sound basis for the prominent role given to the M3 monetary aggregate. Monetary policy instruments and the operational framework of the Eurosystem The operational framework of the Eurosystem has proved to be an effective instrument for steering money market interest rates and for limiting fluctuations. The Eurosystem controls money market interest rates by means of either the provision or withdrawal of liquidity in the banking system. Open market operations play an important role in the context of monetary policy strategy. The weekly main refinancing operations give an indication of the Eurosystem’s monetary policy and provide the largest share of liquidity. Longer-term refinancing operations provide the banking system with longer-term liquidity (three months).