samchain/econo-pairs-v1 huggingface dataset:
The private sector and a business recovery supported the growth of the UK economy following the early 1990s recession. And economic conditions we currently face are not that dissimilar from the world of the mid-1990s. If anything, the external stimulus to growth is stronger – the global economy has bounced back more strongly from the recent downturn and the sterling exchange has depreciated more sharply and at an earlier stage of the cycle than in the early 1990s. There is a worry that domestic demand could be held back by the legacy of the financial crisis and public sector deficit reduction. But that does not appear to be reflected in the most recent data for domestic demand and from the evidence on business investment intentions. And while we should expect a relatively muted recovery in consumer spending, the impact of high household debt levels should not be overstated. This was a  10  Public sector net borrowing was 7.7% of GDP in 1993/4, moving towards a surplus of 0.5% in 1998/9, a swing of 8.2% in the public sector financial balance as a share of GDP. The Budget plans show a 9 percentage point swing – from borrowing of 10.1% in the current financial year to 1.1% in 2015/6. 8  BIS Review 158/2010  major concern in the early 1990s too, when repossessions and mortgage arrears were higher than we have seen through this recession.

In this regard, I welcome the recent compromise as part of the trialogue process on the transposition of Basel III into EU law and I hope it will now be formally adopted as quickly as possible. Moreover, we await the next US package with great interest. An astute observer might object: why did Credit Suisse fail if it met the Basel requirements? The answer is simple: while good regulation is necessary, it is never sufficient. A Highway Code - regulations -, even the best one in the world, will only be effectively enforced if the traffic police - supervisors - are efficient. This proactive supervision is one of the great successes of our European Banking Union. As part of this proactive supervision, we will obviously continue to keep a close eye on the risks affecting the financial sector. We just published our Assessment of risks to the French financial system at the end of June ii and it reiterates our confidence in the solidity of French banks. Nevertheless, we will continue to be even more vigilant to the risk of a disorderly market correction which could affect non-bank players most exposed to leverage and liquidity risk. The second reminder came in the crypto-asset sphere with the "crypto winter" punctuated by a long series of shocks: the collapse of Terra-Luna, the failure of FTX, and the legal proceedings taken against Binance and CoinBase in the United States. Europe was a pioneer in this area by adopting MiCA regulation.
It is perhaps a little harsh – it clearly misses some of the important strengths that still underpin the Irish economy and which will be crucial components of the recovery in the years to come. Yet we can see many elements of the Irish situation in the years 2007 and 2008 in that description. Lacking competitiveness: clearly, wages and prices had risen much too fast since the start of monetary union. From 2000 until 2008 wages (compensation per employee) in Ireland increased on average by nearly 6% per year, more than twice the rate seen in the euro area. This eroded Ireland’s competitive position. Unit labour costs had risen by 50% between 1998 and 2008 while they had risen by only 19% in the euro area during the same time. Unfit, in various aspects of its national economic and especially supervisory policies. All of this made it not well equipped to counteract the emerging imbalances at an early stage and to match the challenges facing the economy when the crisis took hold. Ireland’s current account deficit was 5.3% in 2007 and accounted for 5.6% in 2008. And certainly overweight, in some sectors at least. Ballooning credit and spending excesses had overheated the economy and misdirected resources. In 2007 Ireland was an economy that had become dangerously dependent on construction and housing as a source of economic growth and tax revenue. Overly optimistic expectations both in the private and the public sector played a major role.

Part of this borrowing is used to finance mortgages in Swedish krona and the foreign currency therefore needs to be converted into krona on the FX market. I do not intend to go into this in depth; merely to observe that this has further increased the complexity of the Swedish financial system in that the number of intermediaries has increased. At the same time, the banks have become dependent on the FX market functioning smoothly. Households’ high indebtedness could jeopardise the banks’ funding opportunities Swedish household debt has been rising in line with the increase in housing prices since the mid-1990s. The fact that households today are so heavily indebted means, for instance, that they are sensitive to changes in their personal finances and to disruptions in the housing market, for instance. If housing prices were to fall, this could affect the banks’ possibilities to fund Swedish mortgages. Let me try to explain why. Funding using covered bonds is closely linked to the housing market Around one half of the Swedish banks’ market funding comes from covered bonds. When the banks issue these bonds, they earmark collateral that is only for the market participants investing in bonds. The investors often require a particular extra buffer of collateral, and so the banks often earmark more collateral than is required by the regulations. It is primarily mortgages that are earmarked, and funding with covered bonds is therefore closely linked to developments on the Swedish housing market.
The first, is the increasing significance of Asia in the global economy; second, the extensive international regulatory reforms that is being envisaged by the international community; and third, the rapid growth of Islamic finance and its integration into the international financial system. These trends are set to become significantly more pronounced in the aftermath of this global financial crisis. Asia and the global economy After one of the worst economic crises in modern history, the global economy is now on the path of recovery but with a pace that is set to be uneven. There is now a global shift taking place arising from an increasing growth divergence between the advanced and emerging economies resulting in a change in the configuration of the global economy. This is not only a consequence of the crisis related factors but also due to structural factors prevailing prior to the crisis. We have seen extraordinary and unprecedented measures been taken by the advanced economies to restore stability and the functioning of the financial systems, and to contain the effects of the financial crisis on the economy. While a catastrophe has been averted, the recovery in the advanced world continues to be reliant on policy support, with structural factors yet to be addressed. The IMF’s projection is for growth in the advanced economies for the period 2009 and 2014 to be 1.3% per annum, which is half of what was registered during the period 2000 to 2008.

Soifua ma ia manuia. 2  BIS central bankers’ speeches
The evolution of policy in Japan, in turn, has been informed, in part, by the experience of the U.S. and other nations. So what have we learned to date? Let me highlight six key points. First, and most importantly, managing expectations is critical in the execution of monetary policy at the zero bound. This includes expectations about the central bank’s objectives for inflation and the economy, and expectations about how the central bank will use its tools in the future to achieve these goals. Second, in managing expectations, good communication is essential. Expectations will not be well anchored when communications are muddled or inconsistent, or when a central bank acts in ways that are not consistent with its guidance. Third, actions speak louder than words alone. Thus, there is an important role for asset purchases that ease financial conditions to support growth and keep inflation expectations well anchored. Fourth, the policy instruments interact so that policy as a whole exceeds the sum of its parts. Fifth, at the zero lower bound, risk management becomes extremely important. In particular, because the costs of getting stuck in a liquidity trap with chronic deflation are high, a central bank should put substantial weight on avoiding this outcome. Sixth, the constraints imposed by the zero bound limit what monetary policy can accomplish by itself. This increases the importance of complementary fiscal, financial, and structural policy actions. Credible fiscal policies, actions to ensure a healthy financial system, and structural reforms that lift the potential for growth are very important.

Full details of the survey will be made available in an article published in the 2010 Q4 Quarterly Bulletin on 13 December. 2  Those developments are also consistent with results from the Deloitte CFO surveys – the 2010 Q3 survey indicated that a majority described credit as easily available for the first time since the survey began in mid-2007. BIS Review 161/2010  3  has been maintained at £ billion. Although monetary policy has not been eased substantially further over the past year, the stance of policy remains highly stimulatory and continues to provide significant support to economic activity. The level of sterling following its substantial depreciation through 2007 and 2008 should also aid the recovery by encouraging a rebalancing of our economy towards external demand. However, at first blush, the support provided by the lower level of sterling over the past year looks distinctly underwhelming. Yes, the most recent data suggest that net trade made a positive contribution to growth in the third quarter of this year and this is encouraging. But these early estimates are noisy and prone to revision. Stepping back, net trade has detracted from growth over the past year. And within that, the growth of exports has underperformed expectations, especially when judged against the acceleration in global demand. However, the story is somewhat different if we look at the performance of goods and services exports separately. The lower level of sterling does appear to have supported goods exports, which have increased by well over 10% over the past year.
There is potentially more we can do to provide a mobilisation framework to allow these new entrants to build their businesses under a more proportionate set of regulatory requirements, and this is something we are considering as part For further information on PRA expectations in this area, please see ‘Supervisory Statement 2/18: International insurers: the Prudential Regulation Authority’s approach to branch authorisation and supervision’ 5  5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  of the review of Solvency II – allowing greater space for small scale start-up insurers to innovate and bring new products to the market whilst ensuring that policyholders remain properly protected. Barriers to entry are not limited to authorisation of new insurers. For the London Market in particular, there is a need to react quickly to changes in rates to function effectively as a dynamic market. We should continue to consider measures that could maintain and further enhance the London Market’s pre-eminent position, including our approach to both traditional capital investment and Insurance Linked Securities (ILS). The ability to access capital and obtain regulatory permissions can be particularly critical during market turning events: to recover capital positions, to stabilise the market, and to respond to new opportunities.

The UK is currently the single largest market for non-life insurance globally, with £ of annual premium (equating to c.7% of global insurance premiums) written through the London Market with 85% of this business undertaken in the UK by insurers which are themselves part of groups headquartered overseas.2 UK domiciled insurers alone rank fourth globally in written premiums and UK-domiciled insurers in the life and long-term savings sector manage over £ of assets.3 We have only been able to reach this position, and will only be able to maintain it in future, through open international insurance markets. The Government’s stated policy is to maintain and enhance the position of the UK as a leading international financial sector, and the insurance sector forms a key part of this. An important aspect of achieving this objective is how we ensure that the UK is open and competitive as a place to do business. But what does this mean in practice, and for the insurance sector in particular? One of the key changes wrought by Brexit is the increased role the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) now play in decisions regarding which EU insurers are permitted to operate in the UK market and how they are supervised.
Indeed in the data collection exercise we have just launched we ask for data on a calibration that combines 35% of medium term average index spreads with just 17.5% of excess spot spreads. Similarly, a lower calibration for the average spreads combined with a higher calibration of the excess spot spreads could achieve the same outcome. We are keen to read responses to the DP and to discuss stakeholders’ views on the CRP and its calibration. The breadth of application of the MA by UK insurers has been a unique aspect of our implementation of Solvency II (Chart 1 ): preserving and, indeed, expanding it further underpins the competitiveness of the sector in the UK. This uniqueness has understandably sent MA reform in different directions in the UK and the EU. The EU has chosen to leave the MA calibration untouched. But, in contrast to our focus on widening investment flexibility and MA eligibility, the  Page 6  EU’s approach is looking to tighten their MA eligibility requirements, particularly for structured assets. Prior to Brexit, the UK regime had already been more accommodating of a broader range of assets as appropriate for MA portfolios, including those that were internally rated. Further divergence in the practical use of MA is now possible, as part of the overall package of UKspecific MA reforms, in a way that preserves the same high level prudential outcomes. Reforms to the risk margin are at a more formed stage than those to the MA.

These reforms are also intended to help address the tension between innovation in investments and underwriting, and the strong reliance on historic data in internal models. On reporting, we have already made some changes that significantly reduce the reporting burden for smaller / medium-sized firms. Both the Government and the PRA have engaged the industry on additional reforms that aim to further reduce burden on firms, particularly for returns that have not proved useful in practice. The Government published proposals in this area in its April Consultation Document and a further PRA consultation on additional reductions and improvements will follow later this year. Our intended changes to the MA application process aim to reduce barriers created to timely MA portfolio investment. These reforms could introduce a ‘two-lane’ process, where only more complex or precedent-setting assets would automatically be subject to a complete review prior to approval. Less complex assets could instead receive a streamlined review, wherein certain aspects of the review (such as internal ratings) could be deferred until after the initial approval. As for the internal model application process, safeguards could potentially be used to manage any risks introduced by these reforms to the MA application process. We are also considering potential changes to the MA breach framework, to soften the cliff-edge that currently exists, wherein the PRA must revoke full MA approval if a breach of eligibility conditions is unresolved after two months. This harsh penalty can act as a deterrent in firms’ investment decisions.
This is an encouraging development because it indicates that, as we have moved up from the zero lower bound, money market rates are continuing to move together. We can look into that further by examining the overnight Treasury repo market. Rates on these transactions as reported by the tri-party clearing banks, shown in Figure 6, exhibited a similar shift upward, although they settled modestly lower in the target range than they had in the preliftoff period. In part, this shift likely reflects the fact that the ON RRP offered rate was 5 basis points before liftoff – that is, 5 basis points above the bottom of the target range – and it is now set to 25 basis points, or the bottom of the target range. It also looks as though the increase in the federal funds rate passed through effectively into term money market instruments. Figure 7 shows the recent progression of rates on threemonth Treasury bills and three-month commercial paper. Also shown for comparison is a threemonth overnight index swap quote for the effective federal funds rate. All of these rates rose going into the December FOMC meeting, which makes quite a bit of sense, given that most market participants expected the FOMC to tighten policy at that meeting.35 We also gather information about rates on term unsecured borrowing in our FR 2420 collection, and about term secured transactions from the clearing banks, and these data tell a similar story.

This theoretical and empirical examination gave the Federal Reserve confidence that it could effectively raise rates when the time came while limiting undesirable effects on financial market structure, and also ensured that additional term tool options were available if the combination of the overnight tools – IOR and ON RRP – was not sufficient to provide interest rate control.21 At this point, you might have a question: from late 2008 to late 2015, the federal funds rate traded well within the FOMC’s target range of zero to 25 basis points.22 Shouldn’t this have been conclusive evidence as to the ability of the operational framework to provide sufficient control of interest rates? Unfortunately, the answer is no, because there are natural features of the financial system that likely provide support to interest rates near the zero lower bound, or ZLB. These features include the availability of physical cash and a behavioral aversion by some money market investors to investing at negative rates, and also encompass certain unique features of money markets in the United States, such as legal and regulatory incentives applicable to money market mutual funds and the ability of the government-sponsored enterprises to leave unremunerated deposits at the Federal Reserve.23 As a result, while the pre-liftoff testing suggested that the tools were likely to work well, it wasn’t possible to determine with complete certainty the extent to which market rates were driven by the tools or by ZLB effects.
These differences seem to last over long periods, indicating that the problems are partly due to low mobility in the labour market. In addition, the need for labour market mobility is growing as a result of structural change. The previously typical cyclical pattern, where jobs are shed during a slump and then are recreated when the economy turns around, no longer generally holds true in all industries. Jobs that are lost in a slowdown are being replaced, especially in manufacturing, by increased productivity and information technology. Growth is leading to new jobs but in different places than before. That means that more people have to change workplace or sector, and results in the need for considerable adaptability. More jobs have to be created in, for example, the services sector, perhaps in completely new companies. The structural change that occurred when farmers and forestry workers went into manufacturing was relatively easy. Now the change often entails manufacturing workers having to go into the services sector, a transition that may be more difficult. To the extent that the weak growth in employment is due to structural change in the Swedish economy, from manufacturing jobs to services, there is reason to discuss how the functioning of the labour market can be improved and how the driving forces for new business creation can be strengthened.

More than 20 global FIs have set up innovation centres here. You would have seen during the Innovation Lab Crawl earlier this week some of the exciting things they are experimenting with: digital health solutions tapping on wearable devices; telematics for motor insurance; blockchains to streamline payments; big data to produce customised service offerings. MAS itself has set up an innovation lab – called Looking Glass. It aims to: spur collaboration among MAS, FIs, start-ups, and technologists; and facilitate consultations for start-ups by industry experts on legal, regulatory, and businessrelated matters. Infrastructure for Electronic Payments: UPOS, CAS We have a world-class infrastructure for electronic payments. It is a 24/7, real-time inter-bank fund transfer system. We call it FAST; short for Fast and Secure Transfers. But FAST is grossly under-utilised and Singapore is still heavily dependent on cash and cheques as means of payments. The Association of Banks in Singapore is working on two key initiatives to make electronic payments seamless and convenient for everyone. First, a Central Addressing Scheme (CAS) that will allow you to pay anyone using that person’s mobile number, national ID number, email address, or any other social media address, without the need to know the recipient’s bank or bank account number. Second, a Unified Point-of-Sale (UPOS) terminal that will allow a merchant to accept all major card brands, including those that are contactless or embedded in smartphones. A National KYC Utility Knowing the identity of a customer – or KYC – is one of the biggest pain points in the financial industry.