samchain/econo-pairs-v1 huggingface dataset:
And the price of repo in sterling markets has increased approximately in line with its US counterpart, as measured by the increase in GC repo rates relative to 3-month OIS swaps that carry similar economic risks (Chart 3). Alongside this there has been a deterioration in perceptions of overall sterling secured market function over the past year or so, which participants note has coincided with pressure to reduce balance sheet size due to regulatory reporting requirements – in particular the leverage ratio (Chart 4). Some of this impact may be transitory: as dealers and others adjust to the new arrangements they may find ways to transact more efficiently while staying within the letter and spirit of the regulation. As the paper describes, opportunities for netting could be further increased were a greater proportion of repo transactions to be centrally cleared – around 10% of US Dollar repo transactions are currently cleared centrally, compared with 45% in Sterling, and 65% in Euro. 1 Dealers may improve the optimisation of their balance sheets across the whole group, better allocating leverage headroom in one part of the business to more leverageconstrained activity in other parts of the group. And over time new approaches to intermediation could emerge – some exchanges are exploring platforms to allow end users of the repo market (such as pension funds) to transact directly with one another. However, such innovations and adjustments will only ever provide a partial offset to the underlying changes.

This process of reducing unintended consequences is made easier by close co-ordination of different policymakers, which at the Bank of England is facilitated by having monetary, macro- and micro-prudential policy all under one roof. The role of central banks in money markets Let me turn to the role of central banks as a participant in money markets. Just as private market participants have grappled with new challenges in the post-crisis world, so too have central banks. And we have responded in three ways. First, we have become more flexible in the way we implement changes in the policy rate. The frameworks we use to influence market rates need to recognise the fact that there are a lot more reserves in the system than before, and that regulation has reduced the incentive to arbitrage small differences in money market rates. As the paper sets out, the Fed’s RRP is a good example of adapting to this new reality. The facility improves pass-through efficiency by offering a risk-free asset to a broad range of counterparties that extends beyond banks, thus strengthening the floor on money market rates more generally. The counterpart to this facility in the UK is our ability to issue Bank of England bills, though thus far we haven’t had the need to do so: since we began paying Bank Rate on all reserves in 2009 the wedge between overnight unsecured money market rates and Bank rate has averaged 4bps, and the standard deviation also been 4bps (Chart 6).
A PCC structure would facilitate multiple issuances in one vehicle with its segregation of assets and liabilities, and is sometimes preferred by issuers for its efficiency in cost and operations. b. Second, we understand speed to market is a crucial factor for issuers as it provides certainty for their reinsurance structure. We will work closely with issuers to explore the potential of further streamlining the licensing requirements and process in Singapore. c. Third, we recognise that structuring ILS requires specialised roles beyond the conventional pool of debt capital market teams, such as loss reserve specialists and capital market advisory teams. MAS will explore support for the setting up of specialist teams in Singapore, to facilitate knowledge transfer to the local market. To raise the industry’s skills in this area, there are plans to incorporate catastrophe modelling for catastrophe bonds in existing training programs. d. Fourth, the need for quality data. Data is key for catastrophe risk quantification and the design of risk transfer tools like ILS. We know that there is room to improve data quality in this region and have embarked on the Natural Catastrophe Data Analytics Exchange since April 2017 to bridge the data gap. High resolution data, obtained through innovative technology and new methodologies, can complement other traditional sources of industry data, and support the underwriting of traditional insurance products and structuring of ILS.

After a deep-seated banking crisis, now transmuted into a sovereign debt crisis, the need to reduce debt as the world adjusts to a new equilibrium pattern of spending and trade will mean only a gradual recovery in many advanced economies. Storms from the world economy are likely to stir up the waters through which the UK economy must pass as it too adjusts to a new equilibrium with lower levels of debt and a rebalancing from domestic to external demand. So, my Lord Mayor, there is no shortage of challenges at home. Consumer price inflation has risen to 4½%, and further large rises in utility prices are expected. Output has probably grown by only around 1% or so over the past year. Our banking system faces a need, over time, to build higher levels of capital and find new sources of domestic funding. And regulation must be reformed to respond to the lessons from the crisis. So I want tonight to comment briefly on three themes: monetary policy; macro-prudential policy, and the work of the new Financial Policy Committee at the Bank; and the new approach to banking regulation that will follow the creation of the Prudential Regulation Authority. The challenge facing monetary policy is obvious – the combination of high consumer price inflation and weak economic growth. Both of these might seem surprising given the large amount of spare capacity in the economy.
The pre-crisis consensus was clearly that monetary policy could not affect the supply side of the economy – while it could help stabilise output around its trend, it could not affect that trend. However, there has been some discussion recently among central bankers as to whether monetary policy can have more lasting effects. For example, if an extended period of low demand is creating hysteresis effects, a more accommodative monetary policy that boosts the economy may prevent a permanent downward shift in productivity. That is, it can for a time prevent a cyclical fall in growth from becoming structural too quickly. The jury is still out on this discussion. It is clear that the supply capacity of the economy is determined by its structural features, and monetary policy cannot substitute for this. Nevertheless, some see that monetary policy can play a “defensive” role in a period of  1  “Potential output, economic slack and the link to nominal developments since the start of the crisis”, ECB Monthly Bulletin, November 2013. 2  Claudio Borio, Piti Disyatat and Mikael Juselius, “Rethinking potential output: Embedding information about the financial cycle”, BIS Working Papers, February 2013. 2  BIS central bankers’ speeches  economic weakness. In our case, by delivering our price stability mandate, while we cannot raise growth potential, we can perhaps limit or delay the degree to which it falls.

Financial sector repair There is considerable empirical evidence that a strong driver of aggregate productivity growth is “churn” between firms – less productive firms exiting the market and new innovative firms entering, or existing firms reallocating resources to more productive sectors.3 The job of the financial sector is to ensure that credit allocation supports this process. However, what seems to have happened, at least in parts of the euro area, is that banks with weak balance sheets have retarded this process. One recent study found that larger banks have reallocated credit away from riskier firms, preventing new entrants, while smaller banks have engaged in so-called ever-greening of loans, inhibiting firm exits.4 Weak banks also appear to have slowed down sectoral reallocation. To give just one example, despite the recent improvements in cost and price competitiveness in Greece, the sectoral allocation of credits has not substantially shifted towards export-oriented firms.5 This suggests that banks in certain euro area countries are not facilitating sufficiently the shift towards more productive sectors. Financial sector repair therefore has to be at the core of any policy to raise euro area growth potential. And to ensure that lending is directed towards productive activity, in my view there are two policy priorities. The first is to strengthen bank balance sheets – that is, for losses to be properly acknowledged and for adequate recapitalisation to follow.
to yours: sooner or later, this would cause a political and social crisis, or a crisis of confidence among international investors. Indeed, it is easy to criticise, but hard to act. However, a credible debt reduction strategy is possible by combining three ingredients. All of them are necessary, because none of them is sufficient on its own. The first is time, acting over the long term, while starting rapidly as soon as the Covid-19 crisis ends in 2023. Over the next ten years, we must bring France’s public debt down to at least below its pre-Covid-19 level, i.e. below 100% as clearly as possible. The second ingredient is growth, to be raised by the abovementioned reforms. The third ingredient, which is also essential, consists in improving the efficiency and control of our public spending, which accounts for the highest share of GDP not only in Europe but in all developed countries. Page 14 sur 15  Discussions on this issue often become very sensitive: in France, more than elsewhere, public sector reforms are easily associated with austerity, or even with a liberal ideology of which they would be the Trojan horse. However, Sweden, which is not reputed for being a liberal country, has managed to lower its public spending to less than 50%, while we have increased ours. This is the French paradox: we are always denouncing an austerity that is, however, a long way off.

Thomas Jordan: Strong Swiss franc and large current account surplus – a contradiction? Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Institute of International Studies, Zurich, 19 February 2013. *  *  *  The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch)  For almost 18 months now, the Swiss National Bank (SNB) has been enforcing the minimum exchange rate of CHF 1.20 per euro with the utmost determination. The need for this measure is widely recognised, both domestically and abroad, due to the substantial appreciation of the Swiss franc in summer 2011. At the same time, however, there are isolated voices claiming that given the large current account surplus, the Swiss franc is too weak, and that the SNB should allow the currency to appreciate in order to contribute towards reducing global imbalances. This view is based on a lack of knowledge about the situation in Switzerland. Specific factors are responsible for the Swiss current account surplus. The balance on the trading account, for instance, makes only a modest contribution. The most important elements with regard to the current account surplus are the following: first, investment income from Switzerland's substantial net international investment position, second, financial sector earnings from business with customers abroad, which is traditionally of significance for Switzerland, and third, earnings from merchanting, which have risen sharply over the past decade. The current account surplus is also statistically overestimated.
21.03.2019  Closing remarks Event on the “Impact of the new law on real estate credit”/PWC Margarita Delgado Deputy Governor  Good afternoon, I would like to thank PWC for kindly inviting me to speak at the close of today’s event on the new real estate credit law. I shall try to speak about the most innovative features of the new law from the supervisor’s standpoint, not dwelling too long on the details of the legal changes introduced, as I am sure that they have been widely discussed over the course of the morning. Specifically, I shall focus on the three features of the new law that strike me as particularly important from a supervisory viewpoint: (i) the emphasis given to customer protection, (ii) the need to ensure legal certainty for the mortgage market to function properly and (iii) the growing importance of credit conditions. I shall also refer to the potential short and mediumterm consequences of this law for access to owner-occupied housing, and shall conclude with some thoughts on how the new macroprudential tools may shape the way we supervise certain banking businesses, notably real estate lending. Introduction  As we know only too well, access to home ownership is an issue of great concern to Spanish society. Worldwide, Spain has traditionally been among the countries with the highest owner-occupancy rates. Although this rate has declined from the peak reached in 2002, it is still higher than in other European countries.

It will also be necessary to decide when and how to loosen or remove these credit restrictions at low points in the cycle. I am sure that this part will prove to be more popular and easier to sell to public opinion, but it is worth remembering that a buffer can only be released at a low point in the cycle if one has previously been imposed during the boom. In any event, in the light of recent experience, I believe that we can all agree that the consequences of a failure to act by the supervisor is infinitely worse than the alternative, although the appropriateness and timing of measures to restrict credit will always be controversial. Conclusions I would like to finish by reaffirming the Banco de España’s positive assessment of the new real estate credit law. We consider that the strict regulation of its provisions, along with the increase in the information available to customers in the pre-contractual stage, will help to reduce legal uncertainty and the current high level of litigiousness in this market. I would also like to point out that implementation of the law involves, in many cases, promoting a cultural change in customer relations, for which purpose the wholehearted support of the entire organisation is needed, starting with the governing bodies and senior management. All these elements should improve the functioning of the mortgage market to the benefit of customers and institutions.
Term deposits are likewise similar to IOR; TDF offers a somewhat higher rate to banks that are willing to lock up their funds for a time. 22  The FOMC’s decision to use a target range for the federal funds rate, instead of a point target as was used prior to December 2008, further supported the use of this operating framework. The FOMC’s use of a range supports this framework by underscoring the fact that variation of the effective rate within that range is expected and is consistent with the level of interest rate control it desires. 23  Frost, Logan, Martin, McCabe, Natalucci, and Remache, “Overnight RRP Operations as a Monetary Policy Tool: Some Design Considerations,” February 2015. 24  It seems particularly appropriate to pay close attention to the integration of money markets in light of the increase in bank and dealer balance sheet costs that has ensued from post-crisis changes in financial regulations and other factors. 25  See Chair Yellen’s September 17, 2014, press conference. “To begin normalization, the Committee will raise its target range for the federal funds rate. The Committee expects that the effective federal funds rate may vary within the target range, and could even move outside of that range on occasion, but such movements should have no material effect on financial conditions or the broader economy.”  26  See the September 2014 Policy Normalization Principles and Plans.

We proceed from the fact that the global economy will be bouncing back faster than we expected in February. This will be driven by a large-scale fiscal stimulus in advanced economies and the mass vaccination of people worldwide. The growth of the global economy will boost the demand for Russian exports. Taking into account this factor and the slower recovery of oil production under the OPEC+ agreements, we have raised our forecast for oil prices from 50 to 60 US dollars per barrel this year and to 55 US dollars per barrel next year. The forecast for 2023 remains unchanged at 50 US dollars per barrel. Accordingly, we have also increased the forecasts for exports and the trade surplus. As domestic demand has been expanding, we have revised the imports forecast upwards. The current account surplus will grow to 56 billion US dollars this year from 34 billion US dollars last year. Now, I would like to discuss in detail risks that are beyond our baseline forecast. Proinflationary risks are primarily associated with increased inflation expectations. As inflationary pressure is stronger and supply-side factors exert additional influence on price growth, inflation expectations may stay elevated for longer time. Consequently, the saving ratio may decline faster, with consumer activity rising above expectations. As always, there are risks related to the external sector, including changes in the geopolitical environment. We have always taken them into account.
To the contrary, during the current liberalization period, which commenced with vigor in 1992, the Bank, in conformity with market reforms, has steadily moved towards the use of market-based structures and systems as opposed to direct instruments in the conduct of its monetary policy. In this  BIS Review 48/2004  1  regard, and beginning 1993, deregulation of interest rates, removal of capital controls and freeing of the foreign exchange market were implemented as part of the broader financial sector reforms. As a result, through the use of mainly market-based instruments of monetary policy, the Bank has made several notable achievements. Amongst these, has been its contribution to the reduction of annual inflation to 17.2% in December 2003 from 197.0% at the end of December 1992. Further, inflation has remained just under 20% in the first half of 2004 and it is the Bank’s desire to see single digit inflation within the foreseeable future. The benefits of lower inflation in single digits can not be over-emphasized, especially with regard to the fight against poverty. Madam Chairperson, last October the Bank took a bold stand of effecting a down-ward adjustment in the statutory reserve ratio to 14.0% from 17.5 % on both Kwacha and foreign currency deposit liabilities. This was intended to release funds to commercial banks. The outcome of this policy action has been increased loanable funds being available to commercial banks. This in turn has greatly contributed to the downward trend in lending rates in the economy.

May I, at this point, request that we stand and observe a moment of silence in honour of our past late Governors; R C H Hallet, Valentine S Musakanya, Bitwell R Kuwani, Luke Mwananshiku and Leonard Chivuno and many other former employees of the Bank who passed away during the last 40 years. Thank you. It is important to mention here that most of the former Governors have continued playing critical roles in the financial sector and I can proudly say that three of them today serve as chairmen of commercial banks. In conclusion, Ladies and Gentlemen, may I again welcome you all to this conference, and I urge you to be open and constructive during the deliberations. I thank you. 4  BIS Review 48/2004
Capital incomes are the compensation paid to owners of, for example, machinery and inventories, commercial real estate, residential property and land. As a large part of this capital is owned by firms, it follows that an expected increase in corporate profits must lead to higher growth of either total GDP or of the GDP share that consists of capital income. Experience shows, however, that in the long term the profit share is fairly constant at around one-third of GDP; the remainder, approximately two-thirds, consists of wages. The stable long-term relationship between these shares accordingly means that the trend rate of increase in corporate profits roughly matches GDP growth. Historically, therefore, the increase in corporate profits should lie between 2 and 3 per cent. The historical statistics on the profits of Swedish listed companies are rather inadequate but a look at the American companies in the S&P 500 index shows that their long-term profit growth does not quite come up to the trend for GDP (Diagram 3). There have been periods, however, when profit growth was above this trend; the profit share was then probably higher in the total economy but sooner or later it fell back to the long-term trend.

Publication of aggregate results allows the regulator to communicate to the market and the public our view on the resilience of the sector in plausible, narrated stresses, and identify sector-wide risks. This serves our accountability and can enhance confidence in the capacity of the insurance sector as a whole to continue to support the wider economy through provision of essential financial services. We should also think about whether it will be valuable in the longer term not only to give a sector view but a firm-specific view as well. In stress testing the banking system through the annual cyclical scenario (ACS), the Bank publishes the results for the seven participants. The objectives for the ACS test include improving firms’ risk management and enhancing market discipline, with confidence in disclosures contributing  7  See Discussion Paper 'The 2021 biennial exploratory scenario on the financial risks from climate change' (December 2019). 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  positively to access to capital markets. Publication has been helpful in cementing the integrity of the exercise and being part of the regulator’s accountability. These are valuable benefits, and the current consideration of both the future regulatory framework and the review of Solvency II, on which HM Treasury recently published a call for evidence, suggest we should look carefully at both what we are seeking to achieve, why, and how.