samchain/econo-pairs-v1 huggingface dataset:
The reinvestment horizon is linked to the forward guidance on policy rates: we now say that we will “continue reinvesting, in full, the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time past the date when we start raising the key ECB interest rates […]”. This means that any recalibration of the date-based leg of forward guidance by construction extends the period over which investors expect the ECB to continue reinvesting in full; this prolongs the favourable liquidity conditions and reinforces the downward effect of our rate forward guidance on long-term rates by suppressing term premia (see Chart 5). 7 / 19  BIS central bankers' speeches  8 / 19  BIS central bankers' speeches  If warranted by our policy assessment, net purchases under the APP could be restarted in the future.8 In the event of any resumption of net purchases, associated revisions to the framework of forward guidance would have to be considered in order to make sure that the different instruments continue to be tightly linked and that their synergies are maximised. TLTROs The Governing Council recently decided to start a third series of TLTROs (TLTRO III) to help preserve favourable bank lending conditions and support the smooth transmission of monetary policy. The generous borrowing conditions offered to banks should not only provide a backstop to the banking system but also lower aggregate funding costs, which contributes to the overall accommodative monetary policy stance.

To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. 2/3  BIS central bankers' speeches  In order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer-term growth potential and reducing vulnerabilities. The implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. This is particularly important in view of the overall limited implementation of the 2018 country-specific recommendations, as recently communicated by the European Commission. Regarding fiscal policies, the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are providing support to economic activity. At the same time, countries where government debt is high need to continue rebuilding fiscal buffers. All countries should continue to increase efforts to achieve a more growth-friendly composition of public finances. Likewise, the transparent and consistent implementation of the European Union’s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. Improving the functioning of Economic and Monetary Union remains a priority.
We have shared common destiny for centuries and now we should be ready for dialogue, cooperation and coordination. Above all, when we want to push through common interest in the future, we should work together in order to get a joint view of the events past and present. Thank you for your attention. 4  BIS Review 101/2010

Conference at the Académie des sciences morales et politiques Paris, 19 June 2023 Governance of public expenditure and public services: is there any hope left? Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 of 19 Dear Chairman, Dear Permanent Secretary, Dear Academicians, Ladies and Gentlemen, It is an honour for me to speak before you today and I wish to warmly thank your Chairman and my esteemed predecessor, Jean-Claude Trichet. This year, your collective discussion focuses on the theme of "Good governance". Six years ago, at the invitation of Michel Pébereau, I had the opportunity to use the theme of "Reform" to reflect upon international financial regulations. Today, I will tackle a different aspect: good governance in the public sphere. I would like to thank a number of people who are committed to this cause and who have been kind enough to be here today. As the head of a public institution and a fervent supporter of the public service – and also as a citizen – I consider this to be an essential matter. France appears to be drifting towards a "strange defeat", or, at the very least, a gloomy resignation, reflected in constantly increasing government expenditure and public debt (I), together with diminishing intellectual investment in economic optimisation and public management strategies. (II) There is also a growing feeling that essential public services are continuing to deteriorate. In the face of this public crisis, is there any hope left?
I believe that the development of transparent, comparable and simple securitisation structures, based on high quality standards of underlying assets, and with at least some market segments characterised by high liquidity, is a sine qua non condition for a return to self-sustaining securitisation markets. Indeed, investors need to be able to exercise the required due diligence and to assess the assets that are on offer, with the support of the credit rating agencies, which in turn should have the information and the analytical capacities required for this purpose. This, in turn, calls for a careful definition of the information that should be shared among market participants. The issue of liquidity is even more complex because of the cumulative nature of the conditions underpinning it. Enhanced secondary market liquidity will make the entrance of new investors more likely. A more liquid market may come as a result of better price disclosure, standardisation and less complex structures. However, without institutional investors, liquidity will not reappear. There is some circularity problem here since at the same time, it is more likely that institutional investors return to the market when market liquidity is proven to be there or strongly expected to be back. Finally, less sophisticated and specialised investors may also enter the market, but this would require an even more material increase in the simplicity, standardisation and transparency of securitisation markets. V.  The Eurosystem’s contribution to restoring the ABS markets  Let me dwell on the requirement of enhanced transparency of the underlying asset pools.

  On the demand side, the investor base has been and remains severely eroded and many earlier active investors, such as SIVs and money market funds, are not expected to return to the market anytime soon. Europe in particular suffers from a lack of a significant real-money investor base that could step in.   On the supply side, concomitantly, the profit generating potential of securitisation remains insufficient, since spreads for various ABS still exceed the break-even levels from the issuer’s perspective. At the current levels of spreads, securitisation does not make economic sense for originators in most cases. At the same time, it would appear that current yields, with some exceptions, are not attractive to compensate for the perceived risks in the view of many investors. Therefore, although there are some signs of improvement, the current situation in structured finance continues to impose market funding constraints on banks and to hamper banks in  1  See “The Euro Area Bank Lending Survey”, April 2010, ECB. BIS Review 84/2010  3  providing credit to the economy. In this sense, securitisation is still certainly unable to fulfil the objectives that I highlighted at the beginning of my speech. Going forward, the key question is therefore: how do we bring back investors to the securitisation markets? This is tantamount to asking: how can investor confidence in securitisation be restored?
Although this process of financial market normalization is part of a necessary correction, it is neither easy nor prudent to express what this correction will finally be like. What can be said with some certainty, however, is that volatility will be here for a while and will be associated to lost or reduced access to financing from non-banking financial institutions or even particular banks. The longer and deeper this adjustment, the larger the effects on financial markets and the world economy overall. The most likely final effects will be increased risk premiums (an inevitable or even healthy correction), a deeper and more prolonged adjustment in the US housing market, and some less economic growth in the US and in the world. Evidently, a deepening of these problems could be more hurtful for global growth and the commodity prices. This adjustment comes on after a long period of very expansionary monetary policies in industrial economies that had begun a normalization process. But still, one should not overlook the fact that this correction finds the world economy close to completing the best five-year growth period since the early seventies, with large commercial banks in a very solid position, enterprises with good profits and the main industrial economies with flexible exchange rate regimes, controlled inflation and central banks that have gained great credibility for their commitment to price stability.

In the process, the private sector gets to mitigate the climate risks of its own assets while at the same time seeking reasonable returns. By doing well, we also aim to do good. As an international financial centre and a green finance hub, our vision is to play a big role in harnessing the power of finance to support the transition efforts in the region. The vision is underpinned by our strong commitment and concrete actions that help create a conducive ecosystem where climate financing can scale, and bring about desirable opportunities and outcomes for the financial sector. A vibrant and competitive climate finance ecosystem needs to be underpinned by a few other critical elements: standards, data and, above all, talent. The work requires leadership from the public sector and partnership with the private sector. In all these areas, the HKMA is joining hands with Government agencies, fellow regulators as well as stakeholders from the financial sector, academia and business community. Much of our joint effort is coordinated through the Cross-Agency Steering Group on Green and Sustainable Finance co-founded by the HKMA and the SFC. 1/4  BIS - Central bankers' speeches  First, on standards. A common set of green standards, to the extent possible, is important to enhance the transparency, comparability and efficiency of climate finance. Hong Kong is a front runner in setting regulatory requirements for the financial sector.
Overall wage growth may then be lower than projected and provide the basis for an easing of monetary policy. The global economy appears to be vulnerable to new disturbances. Since summer 2002, international financial market developments have been marked by increased optimism concerning the growth outlook. Equity prices and long-term interest rates have risen. The increase has been uneven, however, and there have been wide fluctuations between major currencies. This may be a reflection of the uncertainty about the strength of the global economic recovery. Developments in the krone exchange rate represent a source of considerable uncertainty. The relationship between the krone exchange rate and the interest rate differential against other countries  6  BIS Review 50/2003  is not necessarily stable over time. Themes in international financial markets shift. We may not yet have seen the full effects of the interest rate reductions on the krone exchange rate. Even though Norges Bank is forward-looking in its conduct of monetary policy, thorough knowledge of the current economic situation is extremely important. An up-to-date and correct picture of the current situation is necessary to make accurate projections for the period ahead. In autumn 2002, Norges Bank established a regional network as a tool to gauge the level of activity in the Norwegian economy. Official statistics and evaluations of developments in financial markets will continue to be the main basis for our assessments, but due to the time lag and revisions of such statistics, supplementary information is useful.

Now, interest rates are believed to have reached their lowest level and are expected to remain at 1 per cent until the end of 2003, with only a gradual rise thereafter. Interest rates were also expected to increase markedly in  2  BIS Review 50/2003  Europe in summer 2002. Instead, interest rates were also reduced here and expectations were revised downwards substantially. The lower projections for growth reflect the effect on the world economy of a number of negative shocks, such as the war in Iraq and the SARS outbreak. It may have taken longer than first expected to correct imbalances generated by overoptimism in sectors such as the IT industry. High oil prices may also have contributed to restraining growth. The combination of low international interest rates and weak cyclical developments contributed to high interest rate differentials against the krone and the strong exchange rate. Activity in the global economy has picked up from the low level prevailing last winter, primarily reflecting high growth in the US and some Asian economies, including Japan. Recent statistics show that the annual rate of GDP growth in the US was 7.2 per cent in the third quarter of 2003. Strong growth in private consumption and a rise in business investment are evidence of a gradual and broadbased upturn. Employment figures are also showing a positive trend and unemployment is falling.
Singapore will fully align its regime to FATF’s new requirements; not only because we are a FATF member, but more importantly, we want to discourage tax evasion monies from attempting to enter our system. As other jurisdictions tighten their regimes and tax evasion monies seek cover, Singapore is sending a clear message that it neither wants nor will tolerate these illicit inflows. This being a significant policy move, we will conduct public consultations and welcome stakeholder inputs to shape a regime that is practical to implement and effective in outcome. Third, Singapore will step up its enforcement resources to deal with suspicious transactions reported by financial institutions. The Commercial Affairs Department will double the manpower of the Suspicious Transaction Reporting Office and enhance its analytical and reporting systems to detect criminal activity and illicit funds. Rigorous supervision Having a good AML/CFT framework is not enough. It is necessary to ensure compliance with the framework through supervision. Since MAS’ supervisory activities are not as visible, let me say more about this. MAS uses a risk-based approach, evaluating the money laundering and terrorism financing risks of each institution by taking into account its business activities; types of customers, products and services; its geographical areas of operation, as well as the quality of the institution’s internal risk management systems and processes in mitigating the risks. MAS conducts both off-site surveillance and on-site inspections to check institutions’ compliance with AML/CFT requirements. This ensures that policies and procedures set out in the institutions’ manuals are adhered to on the ground.

At a time when globalisation may leave many behind in advanced economies,  Page 4 sur 8 when the debate about inequalities is coming back to the forefront – and these are real challenges behind the populist wave –, now is not the moment to give up on our social model. But this ambition must be clear-sighted: in some countries like France and Italy, the high cost of the model and its disappointing performance in terms of growth and employment calls for an acceleration in reforms in the right direction (slide 3). Several European countries, including Germany and Spain, are showing the way forward: they have succeeded in carrying out wide-reaching reforms that are compatible with our shared social model. Progress has been made in all four key areas: Enterprise, Employment, Education and Expenditure reduction. And these reforms are delivering results today: in recent years, GDP and employment have grown much faster in the “reforming” countries, than in France or Italy for instance. II. Beyond our existing assets, we in Europe must put our joint energies into mastering our common destiny. Europe needs all Member States to play their part in the common effort. It needs France, as well as Spain and its constant European commitment. For this to be a success, projects for strengthening Europe have to be carefully selected and prioritized; and we must not only talk about them, we must give ourselves the practical means to achieve concrete results.
Before I do so, I would like to take a step back and focus on three key words, which I believe are imperative for formulating financial sector policy for Thailand and the region as a whole. These three key words are productivity, immunity, and inclusivity. First, an emphasis must be placed on productivity as uplifting productivity is a critical requirement for long term growth of an economy. For one, at current stage, many countries in our region are facing structural transformation of aging workforce. Shrinking workforce can dampen long term growth prospect. We must become more productive in order to increase output level and improve standard of living of our people. Productivity is also needed to boost competitiveness of businesses as expanding global trade network and emergence of large e-business platforms have introduced new competitors into our business landscape. Moreover, roles of banks could be challenged as sharing financial platforms gain prominence in the modern economy, and new fintech firms offer financial products unbundled from the long standing value chain of banking. Without meaningful adjustment—that is improving productivity, long term growth potential of an economy could deteriorate. Second, immunity becomes imperative in the current global economic landscape. We are living in the time of changes, where outcomes can be abrupt, unpredictable, and volatile. Amidst the fallout from the Global Financial Crisis of 2008, where unconventional monetary policies flushed global financial market with excess liquidity, we are now entering the cycle where major central banks have started normalizing their monetary policies.

In any financial market, misconduct is often driven by greed and greed is something no system could be tempered proof. Greed creates mistrust. And mistrust damages confidence. But greed can be mitigated. This can be achieved by establishing a system of consequence management. It is certainly possible to limit or mitigate cases of greed if as a collective, we would not tolerate any case of wrong doing within our community. As a group, we should expect individuals to behave according to the highest professional standards and held accountable for their actions. On this aspect, PPKM had instituted a mechanism to prevent staff with questionable conduct from moving freely between banks without full disclosure of his or her professional history. It is in the interest of the industry that PPKM continue the role as a gatekeeper in setting professional standard with a view to uphold the highest standard of professionalism and conduct among its members. And, this brings me to a third point, we need to enhance market participant’s professional qualification, knowledge and skill set. Financial market is dynamic and evolving, and players need to keep abreast of both domestic and global developments. There are ample financial market courses and programmes offered here in Kuala Lumpur, however majority of these program are still at entry level courses.
At present, roughly a tenth of banks’ drawing capacity is collateralised by assets referencing sterling LIBOR. Those assets include: securities paying a LIBOR-linked coupon; securitisations with embedded LIBOR-linked swaps; and LIBOR-linked loans, in either raw or securitised form. The risk is that, absent appropriate planning, these assets could become increasingly difficult for the Bank to value, risk manage and service as LIBOR cessation approaches. These are activities the Bank must be able to perform in case we have to take that collateral onto our balance sheet in a firm default, in order to protect public funds. A precipitate response to such risks could create a sudden ‘cliff edge’ reduction in drawing capacity, impairing the availability of effective liquidity insurance at a possibly critical moment. In order to avoid this risk and ensure that firms’ borrowing capacity at the Bank is managed progressively through the LIBOR transition period, we are announcing a new policy for LIBOR-linked collateral to allow firms to plan ahead. There are two key elements, summarised in Figure 4:  -  First, from 2020 Q3, we will progressively increase the haircuts on LIBOR-linked collateral pre-positioned with us. Haircuts are scheduled to reach 100% (i.e. implying effective ineligibility) at the end of 2021. -  Second, and in line with the Working Group’s 2020 Q3 target for no new term LIBOR loan issuance, any LIBOR linked collateral issued after October 2020 will be ineligible for use at the Bank.

Among other things, in our own bank lending survey, banks have been reporting an increase in loan demand for all loan categories for two successive quarters, as well as an easing in credit standards for loans to enterprises. However, we should not forget that credit standards overall remain rather tight from a historical perspective. As mentioned before, it was exactly against the backdrop of weak credit dynamics contributing to a subdued inflation outlook that we decided in early September to adopt a number of additional monetary policy measures, specifically designed to support the  2  BIS central bankers’ speeches  extension of credit to the real economy. As they work through the economy, these measures will help inflation rates return to below, but close to, 2%. What else is needed: well, it is now in the hands of governments to act decisively on further structural reforms that will ensure higher sustainable growth and employment in the euro area. Also, on the fiscal policy side, governments should not unravel the progress made in fiscal consolidation, but use any leeway to make fiscal policies more growth-friendly. As regards monetary policy, we remain fully determined to counter risks to the medium-term outlook for inflation. As I said in the European Parliament last Monday, we stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation. BIS central bankers’ speeches  3