samchain/econo-pairs-v1 huggingface dataset:
The fact is that the largest commercial banks played a major role in many of the more problematic phenomena of the recent credit boom and ensuing crisis, including the spread of what I have previously referred to as financial STDs, or securitization transmitted diseases. In the aftermath of the Panic, these viruses linger. Last week, the New York Times printed an interesting article by Joe Nocera, who drew upon the observations of a highly regarded regional banker from Buffalo, Robert Wilmers of M&T Bank.10 Wilmers claimed that of the  7  See the Dodd–Frank Wall Street Reform and Consumer Protection Act, http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=111_cong_bills&docid=f:h4173enr.txt.pdf. 8  See “Restoring American Financial Stability,” a summary of the bill, http://banking.senate.gov/public/_files/FinancialReformSummaryAsFiled.pdf. 9  See “Paradise Lost: Addressing ‘Too Big to Fail,’” speech by Richard W. Fisher at the Cato Institute’s 27th Annual Monetary Conference, Nov. 19, 2009, and “Minsky Moments and Financial Regulatory Reform,” speech by Richard W. Fisher before the 19th Hyman P. Minsky Conference, April 14, 2010. Also see note 5 and “The Blob That Ate Monetary Policy,” by Richard W. Fisher and Harvey Rosenblum, Wall Street Journal, Sept. 28, 2009. 10  See “The Good Banker,” by Joe Nocera, The New York Times, May 30, 2011. BIS central bankers’ speeches  3  $ billion made by the six largest bank-holding companies last year, $ billion derived from trading revenues.

BIS Review 21/2010  Chart 11a: Options-implied weight on falling consumer prices 5-7 years ahead per cent  US CPI <0%  Chart 11b: Options-implied weight on inflation rising by more than 5%, 5-7 years ahead per cent  40  40  35  35  30  30 25  25 US CPI >5%  UK CPI<0%* EA CPI <0%  20  20  15  15  10  10  EA CPI >5%  5  5 UK CPI>5%*  0  0 Nov 2007  Feb May Aug Nov 2008  Feb May Aug Nov 2009  Feb  Nov 2007  Feb May Aug Nov 2008  Feb May 2009  Aug  Nov  Feb  Sources: Bloomberg, RBS and Bank calculations  Sources: Bloomberg, RBS and Bank calculations  Chart 12: Central banks’ balance sheets as a percentage of GDP(a)  Chart 13: UK M4 money growth compared to wider measure of money growth(a) Perc entage c hanges on a y ear earlier 25 M4 Wider meas ure of broad money (a)  20 15 10  M4-IOFCs  5 0 -5  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009  Sources: Bank of England, Bank of Japan, Federal Reserve, Thomson Datastream, www.measuringworth.org and Bank calculations. (a) Bank of England balance sheet data: end-February 1914–66, end-year 1967–2008. UK GDP: annual data (nominal). Federal Reserve balance sheet data: endyear 1914–81, end-July 1982–95, end-year 1996–2008. US GDP: annual data (nominal).
There is a variety of sources of economic uncertainty, ranging from wars, acts of terrorism and natural disasters to changes in economic and financial policies. Professor Bloom highlighted the adverse effects of heightened uncertainty on economic activity. Uncertainty leads firms to cut back or defer hiring and investment decisions. It also drives consumers to put off buying new goods. As a result, uncertainty can escalate financial stress and recession, as well as  1  Nicholas Bloom, 2009, “The impact of uncertainty shocks”, Econometrica 77(3), pp. 623–685. BIS central bankers’ speeches  1  stall labour market recovery.2 What was new was the attempt to measure general and event uncertainty through a variety of indicators, avoid the trap of reverse causation with the economic fluctuations it was trying to explain and insert the variable in a DSGE model. Professor Bloom’s work on uncertainty inspired further research on the effects of uncertainty, including on the links between uncertainty and monetary policy.3 For example, the idea that changes in uncertainty may interact with monetary conditions and can drive global financial cycles was one of the themes in this year’s Jackson Hole Economic Policy Symposium, the annual gathering of prominent central bankers, finance ministers, leading academics and financial market players from around the world.4 Because of its latent nature, uncertainty is difficult to quantify and has to be measured indirectly using a variety of indicators.

Vítor Constâncio: 2012 Bernácer prize award ceremony in honour of Nicholas Bloom Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, on the occasion of the Awarding Ceremony of the Germán Bernácer Prize for Promoting Economic Research in Europe to Nicholas Bloom, Madrid, 24 September 2013. *  *  *  I wish to thank Marie Hoerova for the help in preparing this text. Ladies and Gentlemen, It is a pleasure for me to be part of this session to award the 2012 Germán Bernácer Prize to Nicholas Bloom, Professor of Economics at Stanford University. Nicholas Bloom has made influential contributions to the academic debate in two broad areas, both of which are of great relevance for central bank policy-makers. First, his research on the effects of policy and economic uncertainty on business cycles helped us understand better some of the key contributing factors to the protracted slump in output during what has become known as the Great Recession. Second, his research on the determinants of good management practices at the firm level provided important insights on how to support long-term economic growth and competitiveness, including in the European context. The financial and economic crisis that started in the summer of 2007 brought about unprecedented challenges for central bank policy-makers. Some well-accepted paradigms and widely used models have come to be questioned. It is of course the fact of life that central bankers operate in an ever-changing and, to use one of the keywords from Professor Bloom’s research, uncertain world.
But two domestic transmission channels to consumption and investment will determine the size of the overall impact on our economy: •  the effects of credit constraints; and  •  impact on expectations and confidence. Credit constraints With their own funding rates increasing and a reduction in their ability to distribute risk through securitisation, there is now clear evidence that UK lenders have begun to tighten lending conditions for households and firms. The Bank’s Credit Conditions Survey (CCS) of major UK lenders has identified a change in behaviour since the summer. 6 Contrary to earlier expectations, lenders reported that the availability of secured credit to households had reduced noticeably over the three months to mid-December (Chart 6). Corporate credit availability was also reported to have been reduced significantly over the same period. A further reduction in the general availability of credit was expected over the next three months. The survey suggests that lenders are both raising the price of borrowing and reducing the range of people and firms they are prepared to lend to. There has been a pick up in the average spread of quoted mortgage rates over the appropriate funding rate in recent months (Chart 7). There has also been a fall in the number of mortgage products available for creditimpaired borrowers (Chart 8). The first impact of the tightening in secured credit conditions is being felt in the property markets and lower demand for assets but there will also be direct effects on activity.

In reaching our decisions, the MPC always looks not just at the central projection for the economy but at the risks on either side. That will require not just difficult judgements but careful explanation in the months ahead. Chart 1: ABS CDO issuance  Chart 2: Prices of US sub-prime mortgage credit default swaps(a) $ billion 225  CDO^2  200  Mezz ABS CDO  175  HG ABS CDO  150  $ 110 100 90 80 70 60 50 40 30 20 10 0 Jan 2008  125  AAA AA A BBB BBB-  100 75 50 25  Jan 2007  2007  2006  2005  2004  2003  2002  2001  2000  1999  0  Apr  Jul  Oct  Source: Citi  Source: Bank calculations. (a) ABX.HE 2006 H2. Each index references 20 home equity loan (HEL) ABS of indicated rating issued in 2006 H1. Subprime loans form the vast majority of the collateral backing HEL ABS. Chart 3: 3-month LIBOR spreads over expected policy rates  Chart 4: RMBS issuance by all UK resident issuers  Basis points  £ blns (three month rolling sum) 60  120  (b) Sterling  100  50  US dollar 80  Euro  40  60  30  40  20 10  20  0 0 Apr 2007  Jul  Oct  Source: Bloomberg. (a) 3-month LIBOR spreads over 3-month overnight index swap (OIS) rates.
David Clementi: The Bank of England's roles in monetary and financial stability Speech by Mr David Clementi, Deputy Governor of the Bank of England, at the Association of Private Client Investment Managers and Stockbrokers (APCIMS) Annual Conference, London, 19 October 2001. *  *  *  Introduction Thank you for the kind invitation to address your conference today. APCIMS performs an important function, representing and informing the views of a wide range of private client investment managers, brokers and banks. Its voice is increasingly heard in a number of public debates. At one time, back in 1984, I worked very closely with a number of private client firms as we sought to sell shares to the retail market in British Telecom, the first of the large privatisation issues. It's good to see that a number of the firms involved then are represented here today. When Angela Knight asked me to speak, she said she wanted something which would allow us all, in the midst of our day-to-day preoccupations, to lift our eyes to the horizon. That reminded me of Harold Wilson's description of John F Kennedy: "he had his eyes on the horizon, but his feet on the ground." "Keep your eyes on the horizon and your feet on the ground" certainly ought to be written into every modern central banker's contract of employment. Looking to the future, assessing risks to our economic and financial systems, and - where necessary - acting on these assessments is absolutely core to what we do.

Average earnings have been growing at around 4.5% per year, house prices have been rising by between 10-15%, and total consumer borrowing is the highest in real terms since 1988. But, even given these factors, consumption growth has been strikingly strong. There are, of course, downside risks to the outlook for consumption in the UK. Consumer confidence fell in September, even before the terrorist attacks. Despite the recent rally, equity prices are still much lower than their peaks eighteen months or so ago, and that will have reduced consumers' financial wealth. And there may be the first sign of easing in the labour market which, if it persists, will reduce disposable incomes. Despite this, however, there is little sign yet of any sharp reduction in consumer spending. Retail sales volumes grew by 5.9% in the year to September. That picture of continued strength is corroborated by the CBI Distributive Trades Survey measure for September (gathered largely after the 11 September attack), which was the highest since October 1996. And the higher frequency British Retail Consortium survey suggested that sales volumes by the end of September had returned to pre-attack levels. I focus on the continuing strength of consumption because it - together with its partial correlate on the output side, the retail service sector - is absolutely key to understanding why UK interest rates have fallen less far than in other countries. But, of course, elsewhere in the economy, things have been looking less bright for some time.
Thus, after the May cut in rates, in July the ECB announced that the Governing Council expected rates to remain at the new level, or at a lower level, for a protracted period. In any event, the contribution monetary policy can make to resolving the problems at the root of the crisis is limited, and can hardly go beyond providing the time needed for other economic policies to bear fruit, policies that do have the wherewithal to curb these problems. For full normalisation of the area to come about, Member States must successfully see through the adjustments to their domestic economic policies to adapt them to what a monetary union requires to function. From this perspective, I believe we should assess the progress made towards banking union in Europe. In the coming days, the European Union Council will approve the legislation to underpin the creation of the Single Supervisory Mechanism (SSM). That will formally set in train the process that will culminate in the assumption, by the ECB, of microprudential supervision in the euro area in autumn next year. There is virtual consensus around the conviction that the banking union will be a decisive instrument for breaking the loop between banking risks and sovereign risks, enabling the degree of financial fragmentation still prevailing in the area to be reduced and, we trust, ultimately eliminated.

As the SMR starts to bed in, there are encouraging signs that it is making a difference. For firms, the SMR is clarifying and improving governance, accountability and decision-making. For supervisors, the regime is helping identify weaknesses in governance and accountability, and it is helping them to encourage the necessary changes. Adoption is spreading. Some international firms are voluntarily adopting elements of the SMR’s certification requirements to strengthen their global operations. A number of jurisdictions are applying the principles and features of the SMR. 5  And elements of the regime are included as examples in the FSB’s recently published  toolkit on governance frameworks. 6  While we cannot eliminate misconduct, these measures should reduce its scale and frequency, and they will broaden the sanctions for bad behaviour. All of this will help restore trust in financial markets so that they can work as effectively and efficiently as possible to serve the real economy. Markets Forum 2018 Today marks an inflection point, when we can celebrate what has been achieved but then look ahead to future challenges. The spirit and intention behind FEMR is that continual focus is required because markets continually evolve. 4  The Government has legislated to extend the SM&CR to all other FSMA authorised financial services firms. As a first step, the Government will extend the Regime to insurance firms from 10 December 2018 and will confirm when the Regime will be extended to firms regulated solely by the FCA in due course.
Minister, you have the floor! 2  BIS central bankers’ speeches

This is done through ensuring that comprehensive policies, procedures, limits and controls are in place for all activities and ensuring that expectations for compliance are fully communicated throughout the organization. Secondly, financial institutions’ IT systems and operational risk management processes must be up to date to reduce the risk of fraud due to system breakdowns, hackers, and processing errors. As you all are probably aware, customer information theft is rapidly increasing around the world. Technology is one area where perpetrators can often get ahead of under-prepared  BIS Review 52/2008  1  institutions, gaining access to databases and mainframe systems, and accessing sensitive information including confidential customer data. Key preventive measures include ensuring that IT systems and software are updated frequently to defend against hacking attempts, viruses, and other breaches. Robust system controls that carefully grant and monitor system access are equally important. Sound operational risk management goes beyond technological controls. Financial institutions should have well defined policies, procedures, and limits related to all transaction processing. In particular, those units responsible for executing cash or other transactions on behalf of their companies must ensure that controls include a segregation of duties that allows for an appropriate check and balance process. The lack of segregation of duties is usually a driving factor in fraud from trading activities. In both the Barings episode in the 1990’s and the most recent losses at Société Générale, fraudulent transactions occurred as the traders found a way to control the execution and reconciliation of their trades.
I have in mind, in particular, the framework for the development of decentralised finance (Defi), for which the usual regulatory frameworks come up against the absence of easily identifiable issuers or providers in an environment governed by protocols executed automatically without intermediaries, and the absence of an appropriate jurisdiction for the services offered. In order to build trust in the financial industry of tomorrow, we therefore need to follow together a two-pronged learning curve: exploring the transformation potential of new technologies on the financial sector, and identifying the regulatory, governance and best practice principles that must accompany this transformation. In this respect, I cannot emphasize enough the relevance for us of the experiments that we have recently conducted with the sector, for our activities of putting into circulation the currency that we issue as a central bank, as well as for our activities as supervisor of banks and insurers. The Banque de France thus performed nine experiments with “wholesale” central bank digital currency between mid-2020 and today. As for the ACPR, it conducted this year, following the publication of its July 2020 report on the governance of algorithms which outlines the principles of the proper use of AI in the financial sector, its 1st Tech sprint to test the market in practice on the concept of algorithm explainability.

The relationship between the incumbents and insurgents has been sometimes competitive but often collaborative – and both have been good for the ecosystem. We adopted a multi-pronged strategy to build what is now regarded by many as one of the most vibrant FinTech ecosystems in the world. First, a conducive regulatory approach that facilitates innovation while managing risks: simplifying rules; selectively easing licensing criteria; providing guidance on new areas like cloud computing, robo-advisers, and digital tokens; adopting activity-based regulation right-sized to the risks posed, as in our Payment 1/5  BIS central bankers' speeches  Services Act; and allowing experimentation through regulatory sandboxes. Second, the digital infrastructure necessary for the adoption and proliferation of new technologies: a 24/7, real-time electronic payment system; a national digital identity and trusted data architecture that allows seamless online authentication and financial transactions; digital platforms to connect businesses, financial institutions, and FinTech firms: matching buyers and sellers through, for example, Business sans Borders; and matching problem statements and solutions through, for example, the API Exchange (or APIX); cross-border data and digital connectivity agreements and frameworks; and Project Ubin - a blockchain based prototype platform for cross-border payment and settlement in different currencies on the same network – faster and cheaper than conventional cross-border payment channels.
So as not to overstay my welcome, and given that next week several meetings involving these European institutions are to be held, I propose that we assume that these meetings will eventually see the adoption of the decisions needed to turn the markets around. This assumption about what the European institutions will do allows me to conclude my address by talking exclusively about our national problems. What must Spain do to emerge from the crisis? As I said at the outset, the conjunction of three economic crises, and in particular the worsening of the sovereign debt crisis, mean that precise economic policy implementation is extremely difficult at present, although the diagnosis as to what must be done is relatively simple and widely known. At present, what is most important is to promptly pursue an ambitious reform of our labour market institutions, while continuing to make headway on two key fronts: budgetary consolidation and financial system restructuring. In the past two years significant steps have been taken in both these areas, but to achieve fully satisfactory results, perseverance with the path of reform is needed. Starting with the reform of the labour market institutions, certain measures have been taken recently. But the truth is that, since the outset of democracy, Spain has not been capable of making any meaningful progress in this area, whereas most European countries have used the past three decades to reform their labour systems, in order to achieve higher levels of flexibility and job protection, i.e. greater “flexicurity”.

All I can add today is that a gradual process is no longer sufficient. The seriousness of the situation requires the adoption forthwith of a reform that draws our labour market closer to the levels of job flexibility and security prevailing in most European countries. Reform of our labour institutions is very necessary for many reasons. First, to put an end to the personal and family drama that unemployment entails. But also to help reduce the budget deficit. Indeed a more efficient labour market, that gave us unemployment rates similar to those of other countries, would permit the costs of unemployment – which in Spain amount to around 4% of GDP – to be reduced, and would increase government receipts from income and consumption taxes without tax rates having to be raised. A reduction in unemployment and an increase in employment are also very important for the banking system. First, because high rates of unemployment eventually lead to higher default rates. Second, because a reduction in unemployment is essential to reverse a trend that is having very serious effects on banks, namely the fall in solvent demand for credit. That said, at present, owing to the worsening of the sovereign crisis, supply-side factors are also contributing to the decrease in lending to households and firms which, as usual in this type of situation, affects small and medium-sized firms disproportionately.