samchain/econo-pairs-v1 huggingface dataset:
The Custodian of the Two Holy Mosques has taken a broad range of decisions and measures aiming at restructuring and regulating the economy, updating regulations and legislation to enhance the efficiency and competitiveness of the economy and support the optimal operation of production factors, apart from providing an advanced regulatory and administrative framework and an attractive environment for domestic and foreign investments to achieve diversity in the economic and productive environment in order to continue creating job opportunities for the sons and daughters of the Kingdom. Fortunately, oil prices have constantly improved, helping to accomplish many of the development objectives. As a result, the private sector during the period from 2005 up to the end of 2011 achieved a real annual growth rate averaging 5.5 percent. The balance of payments (BOP) recorded a surplus of Rls 2.5 trillion. The actual expenditure of the public finance stood at Rls 3.8 trillion, of which Rls 1.0 trillion were for capital expenditures. Moreover, the ratio of public debt to GDP declined from 39.2 percent in 2005 to 6.3 percent in 2011. The banking sector recorded strong and constant growth during that period, surpassing significantly the repercussions of the global financial crisis, and total assets of banks rose by more than two fold. Many development projects have been approved for enhancing and modernizing the infrastructure, including roads, airports, telecommunications, water & electricity, health & educational services and the Custodian of the Two Holy Mosques’ Foreign Scholarship Program, which is considered as a long-term investment of human resources .

This seminar will be a useful platform for constructive dialogues among the financial industry, infrastructure-related business sectors, and AIIB, to exchange views on the latest infrastructural development trends, and how we can harness the opportunities arising from the establishment and projects under AIIB. I shall now hand over the time to President Jin for his most anticipated speech. Thank you. 2/2  BIS central bankers' speeches
Households and firms reduced their expenditures in preparation for a possible catastrophe,  BIS Review 145/2009  3  causing a much larger drop in demand than would have occurred without the crisis of expectations. In hindsight, you can say that we overreacted, because the catastrophic scenario did not materialize. But the loss of confidence had a real foundation, both because of the deteriorated global macroeconomic and financial conditions and because we were enduring the deepest crisis ever. In this context, there was also the uncertainty about how and how effectively policies would operate, which has faded thanks to the determination of central banks and finance ministries in the larger part of the world. In our case, the quick reaction of macroeconomic policies has been essential in mitigating the impact of the external crisis. Although our GDP will fall this year, the performance of our economy, from a historic perspective, has been remarkable. In 1982 and 1983, the Chilean economy grew nearly 18 percentage points lower than the world’s average. In 1998 and 1999, this difference was around 4 percentage points. In 2009, estimations point at the drop in output in Chile similar to the world’s average (figure 8). Monetary policy can do little to avoid the immediate effects of this kind of confidence crisis. However, policies do play an essential role in preventing these crises from aggravating, and they provide the grounds for the recovery of expectations. To that end it is necessary to act in a timely manner and with conviction.

The Banque de France tries to follow this piece of advice. To do so, we have adapted our organization and our governance structure with the creation of a Fintech hub within our supervisory function (which has already supported more than 300 FinTechs), the appointment of a Chief Digital Officer and the launch of a Lab to foster innovation within the Banque itself. We are experimenting with new technologies: the Banque de France has been the first central bank to implement a fully-fledged project based on DLT which is now fully operational 3 and we have successfully ran 8 artificial intelligence projects. We are also hosting discussions between 3/4  BIS central bankers' speeches  regulators and the industry: the latest working group on artificial intelligence will deliver its conclusion by end of this year. Finally, as we are doing with today’s conference, we are seeking insights from economic research and trying to be a platform for open debate. I wish you fruitful discussions, and now give the floor to David Andolfatto, Vice President at the Federal Reserve of Saint-Louis, for his keynote lecture. 1 Exemples: Ant Financial (Alibaba Group’s financial services), Tencent, Amazon, Apple, Facebook. See Ztezsche,  Buckley, Arner, Barberis 2017, “From FinTech to TechFin : The regulatory challenges of data-driven finance” 2 E.g. : financial conduct, price manipulation, market integrity risks or money-laundering. 3 Madre  4/4  BIS central bankers' speeches
In a recent survey of the banks and insurers we regulate, conducted as part of our ongoing monitoring of the impact of COVID-19 by the Bank’s Fintech Hub along with colleagues from the PRA, around 45% of those firms that participated reported that the crisis has led to an increase in the importance of AI and data science applications for their future operations, with around 55% reporting no change, and none noting a decrease. The survey also looked at changes in firms’ investment plans and resource commitments for AI projects as well as areas where the crisis has had an impact on existing applications across different business lines. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  While the use of AI has clear benefits in an increasingly data-driven economy, there are risks and challenges. And the impact of those benefits and risks will be felt at different paces and different depths at technological, social, corporate, and systemic levels. It’s useful to think of the risks and challenges in a hierarchical way, starting with those that may become apparent at the data level and building up to the level of models trained on those data; then, widening to the level of the firm, and finally, up to the level of the financial system as a whole. Overlaying this are the regulatory and legal challenges presented by AI.

3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  The specific aims of the Forum are: firstly, to share information and understand the practical challenges of using AI in financial services, identify existing or potential barriers to deployment, and consider any potential risks or trade-offs; secondly, to gather views on areas where principles, guidance, or regulation could support safe adoption of these technologies; and finally, to consider whether once the forum has completed its work ongoing industry input could be useful and if so, what form this could take. Those aims underline the fact that AI is a deep and multi-faceted field requiring a coordinated and collaborative approach from regulators. The knowledge, experience, and expertise of the Forum’s members and observers will be invaluable in helping us to contextualise and frame the Bank’s thinking on AI, its benefits, its risk and challenges, and any possible future policy initiatives. The AI Public-Private Forum is committed to being transparent and will publish summary reports of all Forum and workshop discussions. It will also aim to deliver a final report of its findings and conclusions. However, the outputs of the Forum should not be considered as an indication of future policy by the Bank or the FCA. By being as open and transparent in our approach as possible, and by sharing the information of the Forum publically with all its stakeholders, including other regulators, we hope to further the collective dialogue on how best to support safe adoption of AI in financial services.
Against this background of low profitability, banks have already made significant efforts to reduce their operating expenses, by adjusting their productive capacity. The number of banking groups has been reduced by 44% since 2007. And, from their peak levels in 2008, 3/7  the number of offices and employees in the banking industry have been reduced by 37% and by 31%, respectively. Orderly correction of the excess capacity in the Spanish banking industry has raised its level of efficiency relative to the banking systems of other European countries. However there is still room for further improvement. 2 New technologies - FinTech The second challenge facing traditional banking activity arises from the development of new technologies and entry into the banking market of so-called FinTech companies. Banks are sometimes presented as rigid, inefficient institutions, in contrast to new agile unregulated businesses, which seek to offer a better service to customers through a broad range of innovations. An extreme view is that these businesses could actually displace credit institutions from the provision of traditional financial services. In my opinion this is a simplistic, distorted view of a much more complex reality. Certainly we are facing a major technological transformation of banking activity. Permanent connectivity and the sheer number of mobile devices affect the way in which financial services are provided and used. Users increasingly demand the ability to access their current accounts and to initiate transactions at all times and in all places.

However not all the initiatives that have arisen in response to this demand have the same impact on banking business. Allow me to introduce some nuances. 1. First, it is important to understand that, rather than projects that directly compete with banks, some of these technological innovations are in fact operational tools or improvements that credit institutions can incorporate into their own operations. Without giving an exhaustive list, this would, for example, be true of the use of technology to analyse so-called big data i.e. the analysis at great speed of a massive volume of data also generated at great speed and obtained from many sources. There are businesses that, with this tool, are capable of analysing or predicting customer behaviour using a large amount of unstructured information. This technology has many applications in the field of banking. In fact, one of the main assets of credit institutions is the information they have on their customers. Properly harnessed, this information would enable them to better know their risk profile and their preferences and needs, and thus to adapt the offering of financial products for the benefit of both parties. Moreover, banks have an invaluable asset, namely the confidence of bank customers in the confidentiality of their transactions which, as I will mention later should be nurtured and properly valued.
I mentioned another possible explanation: that the consensus on wage differentials had broken down at the same time that the opening of the labour market vis-à-vis abroad put pressure on those differentials – in some cases, in the direction opposite to that demanded by labour market organisations. This is consistent with theories indicating that, other things being equal, if there is a broader consensus about income distribution, a lower level of unemployment will be consistent with low and stable inflation. Other possible explanations should be borne in mind, however, in any interpretation of developments in the labour market. One is that the recent improvement in terms of trade has created greater scope for non-inflationary wage increases. This is true, to the extent that the improvement is not merely transitory. But even if it is merely transitory, it keeps inflation from rising above target for a while, even if wage increases are well in excess of the level that is consistent with the target in the long run. Another possible explanation is that the equilibrium real exchange rate is rising at present because of the improvement in terms of trade and the reduction of external debt, owing in part to the settlement of the failed banks’ estates and the release and tying-up of offshore krónur. To the extent that this does not surface in a nominal currency appreciation, it will put temporary pressure on wages and prices. It seems to me that a number of signs indicate that all of these explanations apply to some degree.

The growth rate of total MFI credit to euro area residents remained broadly unchanged in that month. Turning to the second pillar, one issue under consideration was the likely further development in world economic activity and particularly real GDP growth in the euro area. Overall, the outlook for growth of the world economy remains favourable. In particular, as far as the decline in real GDP growth in the United States in the third quarter of 2000 is concerned, this may be seen as the first sign of an orderly slowdown towards more sustainable levels, in line with the projections currently available. More generally, the extended period of rising and high oil prices has increased the uncertainty surrounding the sustainability of recent growth trends. However, by contrast with previous periods of strong and prolonged increases in oil prices, the world economy is less dependent on oil today and inflationary pressures are still being contained. This should help to avoid any sustained negative effect on confidence, and thereby ensure that the impact of high oil prices on growth remains moderate over the medium term. Very much the same line of argument applies to the euro area. Euro area real GDP has been growing at a high rate for four consecutive quarters, including the second quarter of 2000. Some monthly indicators which extend into, or cover, the third quarter of this year point to a possible moderation in growth rates.
I shall conclude my remarks by commenting on a change in the terms of admission to the Swiss franc repo system. Deployment of monetary policy instruments in the crisis and trends in the SNB balance sheet From October 2008 to March 2009 we carried out a massive reduction in the Libor target range in several steps. The most important instruments for expanding liquidity during this phase were repo transactions and currency swaps. Since the reduction of the repo rate to 5 basis points in December 2008, we have been pursuing a de facto zero interest rate policy. Beginning in October 2008, the heavy foreign demand for Swiss francs was influencing the level of the Libor – and this made it necessary to conduct Swiss franc/euro currency swaps. Swap agreements with other central banks gave more foreign banks access to Swiss francs, thus bringing the Libor down faster. As of March 2009, in order to loosen the monetary reins further when there was no more room for interest rate reductions, we adopted so-called unconventional measures. These took two forms: intervention in the foreign exchange market and purchases of bonds issued by domestic borrowers. In addition we concluded long-term repo transactions with terms of up to 12 months. So far the measures we have taken have achieved the objectives we set ourselves. The three-month Libor has been close to our target range of 25 basis points since the middle of September.

Foreign currency purchases prevented the Swiss franc from rising against the euro, and in addition the exchange rate of the euro against the Swiss franc has been significantly less volatile. Chart 1 shows the substantial increase in our holdings of foreign exchange reserves as a result of the interventions. Positive conclusions can also be drawn with regard to the bond purchases, which helped to reduce risk premia in the Swiss capital market. To date, bond purchases have totalled around CHF 3 billion. However, we have hardly made any purchases since mid-September due to the substantial improvement on the Swiss franc bond market. BIS Review 167/2009  1  These measures were accompanied by a substantial expansion of the balance sheet (charts 1 and 2): from around CHF 110 billion before the crisis, the SNB’s total assets reached a peak of CHF 245 billion in April of this year. The figure then began to decline, reaching around CHF 210 billion in November. On the asset side of the balance sheet, the fall in foreign currency swaps was mainly responsible for this drop. On the liabilities side, the domestic banks’ sight deposits played the most important role. These have fallen from a weekly peak of CHF 81 billion at the end of April to CHF 47 billion at the end of November. However, liquidity in the banking system is still very high. Before the crisis, sight deposits amounted to an average of some CHF 5 billion only.
In any case, we as the ECB assume that the bonds we purchased under the Securities Markets Programme (SMP) will be fully repaid. One option would be for the ECB to transfer the bonds to the European Stability Mechanism (ESM), which would be more flexible, in respect of, say, maturity extensions. That idea crops up repeatedly, but I don’t think it would be at all feasible politically. We will hold the bonds until maturity under the SMP programme. And when will a decision be made on “Greece III”? Will there also be a haircut? BIS central bankers’ speeches  1  If the country does not succeed in gaining full access to the markets for 2015, the question of a supplementary programme will arise in the course of 2014. But the main concern now is the implementation of the ongoing programme – not what happens after that. Another urgent topic is Ireland. The rescue programme finishes at the end of this year. If there is to be more help, a decision would need to be taken soon. But it’s also possible that the Irish will find their own solution. The Minister for Finance Michael Noonan has, however, announced that Ireland is seeking a precautionary credit line from the ESM to the amount of EUR 10 billion in order to safeguard its return to the capital markets. Would that suffice as a prerequisite for the ECB to purchase Irish government bonds under its Outright Monetary Transactions (OMT) programme in order to support prices if necessary.

The latest retreat in respect of property tax also conflicts with the EU’s country-specific recommendations. Italy has one major problem: its extremely slow potential growth, which by all estimates hovers around 0%. That is what needs to be addressed, everything revolves around that. But how likely do you think it is that something will change. Surely the examples point to the conclusion that reforms might be successfully pushed through were it not for the lack of a sustainable political willingness to reform. I am basically more optimistic. Reforms will be made under the pressure that something has to be done. If there is no compulsion – through pressure on interest rates, say, or a high level of unemployment – nothing will happen. That not only applies to the current problem countries but also to Germany. But many critics actually accuse the ECB of eliminating this market pressure by adopting OMTs. I don’t think that reproach is justified. OMTs are not aimed at harmonising interest rates on government bonds in the euro area. What we wanted was to eliminate the unwarranted redenomination risk from the interest rates. The pressure to reform is still high, but it comes mainly from the high level of unemployment, especially high youth unemployment. Besides the reforms in the individual countries, reforms are proceeding in the euro area itself. Banking union is a key issue. Before the ECB takes on banking supervision, it wants to conduct a rigorous asset quality review.
8  BIS central bankers’ speeches  while model error cannot. Put differently, with market-based CoCos the cost of Type I errors may be relatively modest for end-investors. A second key practical issue is whether it is plausible to imagine an investor base for CoCos emerging. Recent signs have been encouraging. Two major international banks have issued CoCos totalling around $ since the start of the year. Credit Suisse recently issued a $ CoCo in a public auction, which was reportedly 11-times over-subscribed. Some market commentary suggests the CoCo market could grow to around $ trillion over the next few years.20 Despite that progress, investor demand for CoCos remains uncertain. Tellingly, none of the CoCos issued so far have had market-based triggers, none have a graduated ladder of triggers and, in my view, none extend very far up banks’ capital structure. In short, the case for a CDE capital structure is, at present, unproven. But there may be simple, evolutionary ways to catalyse market demand to achieve this capital structure. Perhaps the simplest way to do so would be to require banks to make discretionary distributions to staff and shareholders in CoCos. In this way, an investor base for CoCos would emerge organically and grow in line with banks’ profits. As well as catalysing the CoCo market, this distributive approach would have two further benefits. First, it would boost the resilience of banks by keeping revenues in the business and augmenting banks’ capital base.

Standard & Poor’s (2010), Potential $ Trillion Bank Contingent Capital-Style Issuance Faces Uncertain Investor Interest. BIS central bankers’ speeches  11  Annex Chart 1: Distribution of capital ratio for the retail mortgage book with model error 0.10 0.09 Model error  0.08  Original capital ratio  0.07 0.06 0.05 0.04 0.03 0.02 0.01 0.00 75  80  85  90  95  100  105  110  115  120  125  130  Sources: 2009 Pillar 3 disclosures of Lloyds Banking Group and Royal Bank of Scotland and Bank calculations (a) The model error takes the probability of default (PD) for each given risk bucket of mortgagees as the realisation of a uniformly-distributed random variable across the range of possible PDs within that risk bucket. This maps to a new risk-weighted assets number for the retail mortgage book, and a new capital ratio for this portion of the bank’s book (assuming the initial capital ratio is 100). This error is simulated 5,000 times for each of two banks and the chart shows the resulting distribution. Chart 2: Distribution of capital ratio for the retail mortgage book with model and mapping errors  Sources: 2009 Pillar 3 disclosures of Lloyds Banking Group and Royal Bank of Scotland and Bank calculations (a) The mapping error maps the PD for each mortgagee to the next higher risk bucket. It compounds with the model error described in Chart 1.