samchain/econo-pairs-v1 huggingface dataset:
The key policy rate is set with a view to keeping inflation close to 2.5 percent over time without triggering excessive fluctuations in output and employment. Monetary policy also seeks to be robust and take into account the risk that financial imbalances in the economy build up. Even though the objectives differ, both of these instruments work through banks’ responses. The level of the countercyclical buffer may therefore affect the conduct of monetary policy. Increased buffer requirements may induce banks to increase their lending margins or restrict access to credit in other ways. More restrained lending growth will dampen economic activity. This will in turn contribute to lower inflation. Thus, an increase in capital requirements resulting in rising lending margins suggests, in isolation, a lower key policy rate. Other developments in the economy may amplify or dampen this effect. Allow me to refer to a recently developed version of our model for the Norwegian economy, NEMO, to illustrate this point. In this version of NEMO, the credit market is modelled explicitly. 6 Households and enterprises can borrow from banks, but only against equity. For a household, the value of their dwelling is important as collateral. A rise in house prices can thereby allow households to borrow more, increasing their debt. This mechanism is an example of what is referred to in the literature as a financial accelerator. 7 In the model, banks also face capital requirements that affect their capital costs.

An important topic in the report to the Storting is the follow-up of the report by the commission appointed to review the ethical guidelines for the GPFG. In Norges Bank’s view, it is an advantage that the criteria for observation and exclusion are assessed as a whole in light of evolving ethical norms and new issues. The report will be an important reference document for Norges Bank’s work ahead. Norges Bank maintains a close and constructive dialogue with the Council on Ethics around these issues. As a major shareholder, with an ownership stake in companies over most of the world, the GPFG enjoys the benefits of free, open markets, without special restrictions on the GPFG’s 1/2  BIS central bankers' speeches  investments. The GPFG has a clear financial objective. Norges Bank’s responsible investment activities underpin this objective. Norges Bank has laid down a specific governance document for the work on responsible investment. In addition to exclusions for ethical reasons, we make risk-based divestments from companies for financial reasons. These are companies whose business model is, in our opinion, not sustainable. These divestments differ in principle from ethical exclusions because the justification for the divestment is purely financial, even if there is an ethical aspect to the underlying problems in these companies. We are expanding the scope of this work so as to assess new companies before they are included in the portfolio. Nicolai will say more about this afterwards. Responsible investment is at the same time about much more than what we shouldn’t invest in.
The application of distributional accounts is even more significant during economic crises like the COVID-19 pandemic, where both the effects as well as the mitigating policies can differ significantly across heterogeneous households. The OECD, Eurostat, IMF, UN, and the World Bank joint effort is to provide household distributional information, in line with the national accounts’ totals, on the dimensions of income, consumption and wealth. The new G20 Data Gaps Initiatives have as well incorporated recommendations. Fintech and innovation Technological changes are transforming the financial sector and the economy in general, offering payment services, including cryptocurrencies, international remittances, and cross-border payments and credit. With market innovations also come risks. Central banks should therefore promote the global adoption of a revised classification of economic activities that takes greater account of financial technology service providers, supporting the IFC's recommendation to revise ISIC at the UN level. When new entrants fall outside the perimeter of regulation, it can be difficult to assess risks, including threats to resilience and financial stability. The advances in regulation can be leveraged for statistical purposes and should allow us to move forward in measuring the services offered by these non-bank or unregulated financial intermediaries. As regulation moves into focus into these areas we should develop, for instance, financial inclusion indicators based on the digital financial  3  services offered by Fintech companies. Cryptoassets and digital currencies are another area where regulation can be leveraged for statistical purposes.

To ease and empower the user in manipulating and utilizing these new data we launched a new visualization tool developed in Power-BI. The lesson learned is also that to keep up with the changes and react promptly, we must continue encouraging the digital transformation of our organizations, incorporating advanced analytical techniques, and providing more timely and granular information that considers heterogeneity to complement conventional statistics. As the access to new large-volume databases and the use of granular data almost always poses the challenge of confidentiality, the Central Bank of Chile has sought to implement best practices and safeguards to exploit such information. With this objective, we established a Data Governance Agenda, led by a Strategic Committee that reports directly to the Board and whose executive management is located in the Statistics Division. Likewise, we are working on our Big Data Strategic Project, which contemplates a centralized data repository that all user areas can access. 2  Climate and distributional challenges Central banks actively participate in different initiatives to respond to the demands derived from climate change. In April 2022, the Intergovernmental Panel on Climate Change (IPCC) stressed the critical role of climate data in effectively aligning the financial sector with science-based decarbonization and adaptation goals.
Financial stability is a public good which refers not only to banks, but also to the economy as a whole. Financial stability is influenced by the quality of the public policy mix. Since the previous Report (May 2017), financial stability has remained robust, yet we notice that certain vulnerabilities are still manifest or have been building up, especially with regard to upward pressures on the risk premium for emerging economies, tensions surrounding domestic macroeconomic equilibria stemming from slippages and uncertainty in the budgetary and fiscal policy and higher household indebtedness, the risks being compounded by the correlation between these factors. 1  Looking at macroeconomic fundamentals, several favourable indicators are noteworthy:       Romania’s major advantage is the low public debt stock (37.4 percent of GDP), together with the drop in the refinancing risk, due mainly to the extension in the maturity of public debt (Figures 1 and 2). Public debt spans mostly the medium or long term (94 percent of total, on the domestic and external markets alike – with domestic debt accounting for 48 percent of total or 17 percent of GDP) (Figure 3). Another advantage for Romania consists in the sizeable international reserves (Figure 4). Yet, international reserves play a preventive role and they cannot make up for the structural worsening of some indicators. The Romanian economy posted a high growth rate in the first nine months of 2017 (7 percent in the first three quarters of 2017 versus the same year-earlier period) (Figure 5).

Chart 1: Annual GDP growth percentage changes on a year earlier 12 10 Average annual grow th since 1970  8 6 4 2 0 -2 -4 -6  1970  1975  BIS Review 5/2009  1980  1985  1990  1995  2000  2005  5  Chart 2: Property prices Indices: March 2003 = 100 150 Rat io of house prices t o earnings  140 130 120 110 100 90 80  Rat io of commercial property prices t o PNFCs profit s  70 60 50  98  99  00  01  02  03  04  05  06  07  Chart 3: Customer funding gap  Chart 4: Survey measures of activity £ billions  Ratio  Cust omer funding gap (RHS) Int erbank deposits from abroad (RHS) Household saving rat io(b)(LHS)  8 7  5  500  4  400  3  300  2  200  1  100 0 02  03  04  05  06  07  08  Expansion  Indices: 50 = output unchanged on a month ago 70  700 600  0  6  800  6  01  08  60  50  Construction Services  40 Contraction  Manufacturing  30  97 98 99 00 01 02 03 04 05 06 07 08  BIS Review 5/2009  Chart 5: Global output  Chart 6: Investment intentions 65  Global output balance  August 2008 60  Services Manufacturing  Balance reporting an upwards revision to 40  55  30  50  20  45  10 + 0 10  UK CIPS output 40 35  20  30 2006  2007  2008  30 88 90 92  94 96 98 00  02 04 06 08  Chart 7: Growth in secured lending 3m annualised growth rates (nsa)  Other lenders Major lenders  25  20  15  10  5  0  -5  -10 2003  BIS Review 5/2009  2004  2005  2006  2007  2008  7
You may be surprised to hear that we started a form of this exercise immediately after the tequila crisis in early 1995, well before the continuation of that crisis, now best described as the crisis of international finance, hit this region. While we were able to put together domestic contingency measures, some of which in the event had to be invoked, consideration of issues, involving as it did cooperation at the international and regional levels, took time. In any case, I must confess that none of us involved in this work, in Hong Kong and in the regional forums, were able to appreciate, let alone predict, when and how the crisis would hit us and how severe it would be. There was a lack of urgency and an abundance of scepticism about regional monetary cooperation. We have since pushed much harder in the international and regional forums, to the extent, I fear, that we might have become a little too noisy for the comfort of those who are, for one reason or another, in favour of maintaining the status quo in the international financial architecture. Indeed, of great concern to us is the inadequacy of the international financial architecture to cope with and harness the explosion of international finance. The size and volatility of global capital flows have grown tremendously relative to the global economy. Global output has grown by 26% between 1990 and 1997, before the financial crisis hit us. Global trade in goods has grown faster by 64%.

BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5  6  BIS central bankers’ speeches
Only for more complex organizations, a more extensive technological infrastructure is needed. Let’s come to the answer to the question then. To have a well established, in other words, efficient risk management system, first we need to develop the risk culture within our organizations meaning that we need to make sure that at all levels every person understands the risks the institution is exposed to. It is the responsibility of top management to provide that kind of information by having a clear approach to risk, its appetite for risk and assigning responsibility for assuming and controlling risks. Therefore, the first step in risk management process is to identify the risks the institution is exposed to and to quantify those risks. Effective risk management requires that a consistent methodology be developed for analyzing risk. Important steps in risk management analysis are as follows: •  identifying the key financial flows;  •  determining the appropriate time horizon;  •  setting a benchmark;  •  defining the institution’s return objectives and views toward risk. As you all know, most progress has been made in the measurement of market risk and much work is now being done in many places to construct models for a better management of credit risk. Difficulties with credit risk measurement lies in the lack of statistics about individual default probabilities. Even if these default probabilities can be estimated reasonably accurately, it is still rather difficult to combine them into portfolio assessments.

The reason for that partly stems from the lack of statistical knowledge about the interaction between variables. Therefore, the models mostly tend to rest on simplified assumptions based on subjective judgments. I do not want to go into details about the technical aspects of the risk measurement methods, but I would like to emphasize that it is necessary to combine them with sound judgment and common sense. Since these models are no more than simplified and limited images of the real world, they are better to be used having this fact in mind and the decisions must be taken not solely relying on the results of these models. The results should be supported with scenario analysis, stress testing and most importantly with the sound judgment of the decision makers. Another important aspect of risk analysis is that it should be integrated, meaning that the analysis results for different risk types should be comparable with each other to facilitate decision making. It necessitates that the assumptions, data, valuation models used in analyzing different types of risks be the same or at least consistent with each other. Organizationally, the integration of risk analysis requires that there be a single, common risk management authority for the whole organization. At the beginning, it might not be easy to look at risk on an institution wide basis. Since it requires a considerable amount of capital to be invested either in terms of technology, or in terms of staff.
I think that Basel II recognizes the importance of a combination of micro and macro factors for achieving greater financial stability. Furthermore, I would say that Basel II incorporates some of the key basic principles that are also built in modern approaches to monetary policy: a flexible and forward-looking approach, anticipatory rather than reactive behaviour to risk, and the need to take into account market views. Looking into the future, we must direct our resources to ensure that banking supervision in the 21st century is more dynamic, more preventive, more flexible, more inclusive, and more transparent. We should continue adapting and learning. I believe the ultimate objective of financial stability increasingly requires co-operation and properly aligned incentives on the part of the industry, markets, and supervisors. Thank you. BIS Review 34/2005  7

Concerns that systemic sovereign issuers may lose market access fed fears that they may be forced to redeem their liabilities in a currency different from the euro, and thus de facto leave the euro area. “Redenomination fears” became a new source of market anxiety. There was a risk that such unwarranted concerns would become self-fulfilling and the spectre of destructive tail scenarios was looming. In this context, the process of financial integration, which had evolved at a rapid pace since the inception of the euro, was partially reversed, giving way to fragmentation. Interbank financial fragmentation per se was not a new phenomenon in the post-Lehman world. However, during the most severe stages of the sovereign crisis the fractures across the euro area were not idiosyncratic but systemic – that is, they ran along national borders. This reversal of the integration process risked undoing one of the key benefits of the common currency. Fragmentation led to an impairment of the monetary policy transmission mechanism. The monetary impulse that the ECB had swiftly introduced in response to the rising risks to price stability was no longer transmitted uniformly throughout the entire euro area. While the ECB had brought its official policy interest rates to historical lows, a number of countries were not in a position to take advantage of monetary accommodation. Banks in those countries were tightening credit conditions, running against the monetary policy intentions of the central bank, with negative repercussions on access to finance, in particular for small and mediumsized enterprises.
In their Consultancy Study, KPMG/Barents identified this as an important issue as the banking sector becomes more competitive and the level of risk possibly increases. They also considered that the current arrangements, which give priority to small depositors, did not appear to have sufficiently raised the crisis of confidence threshold to avoid bank runs. They therefore recommended that the issue of deposit protection should be looked at again. This we have done in the form of a new consultancy study by Arthur Andersen that was completed in July of this year. This has looked at various options for deposit protection, including maintenance of the status quo at one extreme and the introduction of an explicit scheme for deposit insurance at the other. Such schemes are increasingly being introduced around the world and are advocated by a number of international standard setting bodies. The drawbacks of deposit insurance are however well known, including the risk of increased systemic instability due to moral hazard. The costs of such a scheme would also need to be carefully considered. This is a controversial issue that will need to be fully debated. Subject to views of Exco, it is our intention to undertake a consultation on the various options for deposit protection at the beginning of October. If it is eventually decided to introduce one of these options, further consultation would then be required on the detailed arrangements. Risk-based supervision Of course, the best thing would be for the safety net not to be actually used.

This is a substantial project that will take about a year to complete. In the meantime, we shall be issuing new and revised supervisory guidelines in the new format as they come off the production line. Conclusions To sum up, our reform package is not intended to be revolutionary. The Hong Kong banking system is already well-managed and competitive. But even good players need to improve their game as conditions become tougher. The main responsibility for doing this in the Hong Kong banking context will rest with the banks themselves. We in the HKMA are trying to do our bit by removing possible barriers to change in a cautious manner, and by making sure that our supervisory approach remains appropriate to the changing market environment. 5  BIS Review 69/2000
3  3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  And all these systems in the UK – whether card or bank payment – still depend on existing core infrastructure meaning they either carry the associated costs and limitations on speed or they require the right point of sale infrastructure for their full benefits to be realised. The scope for improving cross border payments is bigger still. These can cost up to 10 times their domestic equivalent.9 Anti-money laundering checks that are rightly required can be cumbersome, and settlement is slow with money taking up to a week to reach the recipient. Most fundamentally, the new payment system must end the inequity that the people with the least money pay the most for financial services. The revolution of payments may not be driven by the old bank-based systems but by a new architecture. Major changes are on the horizon, bringing enormous advantages but also more than a few new challenges. That’s why the Bank fully supports the Payments Strategy Review the Chancellor has launched this evening. To support private innovation and to empower competition, the Bank is levelling the playing field between old and new. This means allowing competitors access to the same resources as incumbents while holding the same risks to the same standards. The Bank is in the midst of an ambitious rebuild of its Real Time Gross Settlement (RTGS) system, which processes £ billion of payments on average every day.

Victims of financial scams may call their bank's hotlines which are operating 24 hours a day, 7 days a week or NSRC's 997 hotline to lodge reports. I also wish to highlight that in trying to trace and intercept stolen funds, and to prevent further losses, time is of the essence. Therefore, victims must immediately call their banks or 997 as soon as they discover that they have been scammed. The NSRC will initiate an immediate response, but victims must make a police report to furnish more detailed information to allow the authorities to investigate the matter. The NSRC is an important element in our fight to combat scams. But, as they say, prevention is better than cure. In this regard, it is important that all of us take actions to protect ourselves from becoming victims of financial scams. Each and every one of us should remain vigilant and on guard to safeguard our banking information. In the Financial Capability and Inclusion Demand survey which BNM recently conducted, one third or 37 percent of respondents stated that they would be willing to share their bank account passwords or PIN numbers with their close friends! This statistic is indeed very troubling. We must take responsibility of our banking security credentials just like how we should take good care of our prized possessions. We also need to ensure that our computers and mobile devices are secure and running up-to-date software. Remember not to download files or applications such as Android Package Kit from unverified sources or links.