samchain/econo-pairs-v1 huggingface dataset:
Limited losses on subprime loans ultimately led to the destruction of millions of jobs throughout the world, and the links between finance and the real economy were cruelly laid bare. ii)  But finance can certainly not be considered “all powerful”: in my opinion, the world of finance only has the political power that State governments choose to give it. •  Granted, the difficulties some countries were facing, notably in the euro area, were exacerbated by financial market pressures – think back to the attacks on Italian debt in the summer of 2011. But if the markets were able to exert this pressure, it was because those countries had, in a sense, put themselves at their mercy by demanding that they finance their ever-expanding public deficits, even during periods of growth. •  In nearly all the crises faced by the euro area since 2009, it is true that market reactions were often brutal and even extreme. But these reactions were frequently based on legitimate fears: for example the sustainability of Greek debt, weaknesses in the institutions of monetary union and divergences in competitiveness between euro area Member States. Again, it was by failing to make the necessary efforts (to ensure budget discipline, preserve competitiveness or finalise the institutions of a European financial union, for example) that these countries put themselves in a position to be rushed or even pressured by the markets and bear the consequences of their overreaction. Governments should not use finance as an alibi or as a scapegoat.

On the contrary, they should assert their ascendancy over it through strict financial management. 2. Finance should not dominate the economy, it should serve it. i)  Reasserting the importance of regulation and supervision:  BIS central bankers’ speeches  1  •  The period from the 1990s to the start of the 2000s is sometimes called “The Great Moderation” because inflation remained stable at moderate levels and growth appeared solid and sustainable. In reality, however, the period saw frequent buildups of financial excesses. These excesses led to the crisis, and they were firmly rooted in the dogma of self-regulation – a dogma which was itself fostered by the belief that financial markets were somehow sacred and inherently “efficient”, capable of setting “real” prices. •  The crisis completely discredited this theory. From the first sparks of turmoil, the lack of transparency in certain segments of the market – notably CDOs – significantly exacerbated the loss of confidence. Financial institutions had insufficient capital cushions to absorb the shocks, leading to bankruptcies and forcing the government to bail them out, a process that was extremely costly for public finances, but also very damaging to financial sector accountability, as at times it meant bank losses were “socialised” whereas previously their profits had been “privatised”. This is the problem of moral hazard, a subject which will no doubt come up over the course of this session.
Inflation in services is also increasing but here it is interesting to point out that whereas supply side factors were the main driver of services inflation until the end of 2021, demand factors have been making an increasing contribution to services inflation throughout 2022, and ended up surpassing supply driven factors in the third quarter. A similar increasing contribution of demand drivers versus supply drivers is observed in Non-Energy Industrial Goods inflation in 2022. So, Headline HICP inflation is projected to rise further from the already very high levels, averaging to 8.1% in 2022, then decreasing to 5.5% next year and to 2.3% in 2024. But these are annual averages of inflation. This is also important because in order to reach the 5.5% average inflation next year, since inflation starts in the coming year at a high level, it means that inflation is expected to be at 3.3% in the fourth quarter of 2023, assuming, of course, there are no new external shocks. The aim of monetary policy, through higher interest rates, is to support disinflationary pressures through downward pressure on demand. So Monetary Policy has a "more" difficult job than when dealing only with "typical" demand driven inflation. 1/2  BIS - Central bankers' speeches  Given the above considerations and the current highly uncertain environment, the inherent flexibility of the meeting by meeting approach we decided at the Governing Council is well suited to calibrating monetary policy, in line with the incoming data and the evolving outlook. Thank you.

Constantinos Herodotou: Introduction - 13th Limassol Economic Forum Introduction of Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, at the 13th Limassol Economic Forum, Limassol, 21 October 2022. *** I would like to start with thanking Yiannis and Mario for accepting my invitation to participate in this panel discussion with me. – Mario, Obrigado por aceitar o meu convite. It is a pleasure to discuss the inflation challenges during these difficult times of high inflation and elevated economic uncertainty with my Governing Council colleagues and friends Mario and Yiannis. The war in Ukraine has disrupted the return to normality that we expected after the end of the pandemic lockdown periods. Central Banks around the world are facing the challenge to put under control excessive and persistent inflationary dynamics. So it is informative to look at the main components of these inflation dynamics, in other words which items drive inflation up the most. The war exacerbated massively cost push inflation, primarily through the energy price shock. In measuring energy inflation we include among others the prices of fuel, gas as well as electricity prices. This inflationary dynamic continues to persist with energy price pressures, in the most recent measure last month, being extraordinarily high at 40.7% compared to 38.6% in August. The second major contributor to inflation is food prices which grew by 11.8% in September compared with 10.6% in August. This is attributed to higher input costs related to the energy price increases, disruptions to trade in food commodities and adverse weather conditions.
Chart: Long-term yields and term premiums In addition, the central banks’ purchases have pushed up prices for government bonds and pushed down yields. Term premiums on government bonds have fallen. While 10-year government bond yields in the US and UK are now at around 2 percent, German yields are as low as less than 1 percent. BIS central bankers’ speeches  5  Chart: Credit premiums and equity prices Another important transmission channel into the economy is the portfolio rebalancing channel. Investors selling government bonds are left with a more liquid portfolio, which they then seek to invest in other financial assets. Prices for a number of securities have risen, and yields on bonds issued by banks and other enterprises have fallen. Premiums on covered bonds, for example, have fallen back to the very low levels prevailing in the pre-crisis period. A fourth transmission channel operates via global financial markets. Cross-border capital movements as a result of portfolio rebalancing have generated exchange rate fluctuations. Unconventional monetary policy can contribute to a depreciation of the domestic currency, providing a positive extra effect of the policy in the short term. However, the effect diminishes when a number of countries implement quantitative easing and policy rate cuts in parallel. Exchange rate movements may then quickly reverse. Increased volatility creates an environment of uncertainty. Capital inflows and a stronger exchange rate have at the same time created challenges in other countries, not least in some emerging economies.

For details on liquidity management in Sweden, see “The Riksbank’s operational framework for the implementation of monetary policy – a review”, Riksbank Studies, March 2014, Sveriges Riksbank. 6  In Denmark and Switzerland, the interest rate on banks’ marginal deposit facility at the central bank corresponds to our reserve rate. For details on the liquidity management system in Denmark, see Jørgensen, A. and Lars Risbjerg (2012): “Negative interest rates”, Monetary Review, 3rd Quarter 2012, Part 1, Danmarks Nationalbank. 7  The policy rate in the euro area is the refinancing rate, which is the minimum bid rate in the ECB’s weekly market operations. BIS central bankers’ speeches  3  Excess reserves have increased substantially since the ECB started to provide banks with long-term loans and implemented quantitative easing. This is illustrated by the grey area in the chart. As a result, the overnight interbank rate has remained below the policy rate and just above the reserve rate, as shown in the chart. Negative rates have their limitations In the euro area and Sweden, the aim of unconventional monetary policy has been to bring inflation up towards the inflation target. Negative rates – in combination with asset purchases – are intended to boost activity and prevent low inflation from becoming entrenched. The effects can be transmitted via both lower bank interest rates and a weaker exchange rate. In other words, negative money market rates operate through the usual channels.
5  Bloom (2009) shows that higher uncertainty tends to lead to lower investment because it widens the “zone of inaction” associated with companies waiting for the economic environment to move decisively in once direction or the other. The partial irreversibility of investment means that there are more companies at the margin deciding whether to invest than those at the corresponding disinvestment margin. Widening this region of inaction causes more new investments than disinvestments to be cancelled, and hence lowers total investment. BIS central bankers’ speeches  3  successful companies with the brightest futures that are likely to be most affected in this way, since they have the most to lose.6 As I said, the good news is that the cloud of uncertainty has started to lift. And just as heightened uncertainty greatly amplified the downturn, this reduction in uncertainty can provide a powerful spur to the recovery. This leads to our second question for today: will the recovery last? Will it last? The reduction in uncertainty and the easing of credit conditions appear to have started to unlock pent-up demand and so fuel a recovery. That recovery to date has been largely driven on the household side: high-street sales have increased modestly as consumers have spent a greater share of their pay, and investment in residential housing has increased significantly.

We can certainly tackle the smallness, in terms of building bigger markets and effective shock absorbers, but I would be really loath to see openness tackled, for this would imply restrictions and controls that undermine the efficiency of international financial intermediation and hamper the potential for economic growth and development. Elsewhere, I have addressed a few times the question of how we can build bigger markets through regional cooperative efforts. The idea of an Asian Monetary Union is far-fetched. I would be the first to admit that, even though I also claim to be the first to draw attention to the idea publicly. So I will not go into that now, or the subject of regional monetary cooperation, except to say that we shall continue, for the time being, to urge the building of a more robust financial infrastructure for the region, and the improvement and harmonisation of regulatory and supervisory standards. These need not be pursued or be seen as preludes to further steps in a particular direction in the context of any wider regional initiative, but purely as things desirable in their own right, managing risks and reducing the probability of systemic problems occurring. We have a number of regional initiatives in this area, and have made some, but slow, progress. There are the liquidity assistance arrangements in the form of the bilateral repurchase agreements we initiated and put in place in 1995.
And it will foreseeably have a negative impact on living standards in Iceland, as in many other places. Honoured guests: In 1973, the OPEC nations declared an embargo on the sale of oil to countries that had supported Israel in the Yom Kippur War. The goal was to use oil as a political weapon. The result was that the price of oil shot up from 3 US dollars per barrel to 12 dollars per barrel – a surge of nearly 300%. The shock put an end to a 30-year period of prosperity in the West and marked the beginning of a long inflationary episode. Actually, OPEC’s bid to use oil as a weapon misfired. Prompted by higher prices, many other countries started producing oil, including our cousins the Norwegians, and others began using other energy sources. Increased production pushed prices down once again. Oil merely marked the beginning of the surge in inflation, but over time it was not the driver of the episode. Inflation was catalysed by two factors, which varied in importance from one country to another. The oil shock came after the end of the Bretton Woods pegged exchange rate system, which had provided the anchor for stability. Thereafter, the response was up to each country. Many central banks had lost sight of their fundamental objective of maintaining price stability because they were too busy with other goals, such as creating jobs or financing government spending.

The Digital Marketplace aims to connect ESG technology providers to investors, financial institutions, and corporates, to facilitate partnerships and investments for ESG solutions. The aim is to launch this also next year. Project Greenprint and the ESG Impact Hub are not MAS projects, or even Singapore projects. They are open-ended, collaborative platforms, for financial institutions and FinTech players from around the world to connect to, collaborate, and co-create innovative solutions to advance the sustainability agenda. Our goal is to foster a vibrant ESG FinTech ecosystem spanning across countries. In this effort, we hope Singapore can play a role as a launchpad for ESG FinTech solutions and enable financial institutions in Singapore and in the region to play a more active role in Asia's and the world's transition to net-zero. Finance and technology can together help to create a more inclusive society and a more sustainable planet. 7/8  BIS - Central bankers' speeches  I have offered two specific areas of priority in inclusion and sustainability that the confluence of finance and technology can focus on: cross-border payments and ESG data. I hope many of you will step forward to apply your creative energies and technological skills to make progress in these two areas. You will find in Singapore and in MAS a welcoming partner to explore and test-bed ideas. Before I close, I would like to take this opportunity to make a pitch for the upcoming Singapore FinTech Festival. The Festival will be held in Singapore from 2 to 4 November this year.
In China, growth has slowed in the face of mobility restrictions imposed in line with the zero-COVID policy but inflation is not a problem and there is sufficient policy space to support growth. In emerging Asia, where the uptick in inflation has been more recent and less sharp, the lifting of mobility and travel restrictions is likely to spur a recovery in demand and  possibly some price pressures. Demand-pull price pressures have been accentuated by a variety of supply-side disruptions, worsening inflation. Supply chain frictions began to emerge in H2 last year, even before the Russia-Ukraine conflict. Intermittent movement restrictions in various economies caused bottlenecks across production chains, for example by interrupting freight handling in major ports. The most significant supply shock has, of course, been the Russia-Ukraine war. Russia and Ukraine are major producers and exporters of oil and gas, and a variety of food grains and commodities. The disruption to these supplies has sparked inflationary effects across the world. The disruption of Russian oil and gas supplies to Europe is pushing up energy prices worldwide. The impact on fuel and electricity prices across the world has been almost instantaneous. The disruption of grain exports from Russia and Ukraine is having knock-on price effects across the food production chain. The two countries make up 25% of global exports of wheat and barley, and 14% of corn. These grains are used in a variety of foodstuff, whose prices have consequently been pushed up.

Globally, given the high degree of leverage built up during the last 10 years of accommodative monetary policy, the ongoing sharp increases in interest rates poses potential risks of debt defaults, market volatility, and financial instability. According to the BIS, average private sector debt service ratios in advanced economies could rise to their highest level in over a decade. According to the IMF estimates, around 30% of emerging market economies and 60% of low-income countries could be at or near conditions of debt distress. Interest rates in Singapore have risen, alongside the pick-up in US interest rates. The increase in domestic interbank interest rates has in turn led to a rise in lending and mortgage rates in Singapore. Domestic interest rates are expected to rise further as global central banks continue to raise rates, adding to the debt servicing burdens of corporates and households. MAS is closely monitoring any systemic risk to the financial system arising from debt related stresses in the corporate and household sectors. MAS subjects all major banks to rigorous stress testing to assess any vulnerabilities in their portfolios. Regulatory limits on sectoral exposures (such as for property) and to single borrowers help to ensure that banks’ corporate credit risk profiles are diversified. MAS supervisors have stepped up engagement with banks on their asset quality, including the adequacy of provisioning against possible asset quality deterioration. Corporates in Singapore continue to manage debt-related risks with sufficient liquidity holdings built up on post-COVID earnings recovery.
Anita Angelovska Bezhoska: Strengthening of the institutional capacity of the NBRNM in the process of its accession to the ESCB Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the opening conference of the Twinning Project "Strengthening of the institutional capacity of the NBRNM in the process of its accession to the ESCB", Skopje, 30 October 2019. * * * Your Excellency Gerberich, dear Mr. Janmaat, Secretary Vučić, representatives of the central banks of Germany and Croatia, ladies and gentlemen, It is my great pleasure to address you at today’s event to mark the launch of a particularly important project that we expect to contribute to our further profiling as a modern central bank, with strong capacity and readiness to join the European family of central banks. The European Union has been important institutional, economic and political benchmark for us from the outset of the transition process. The EU pre-accession process itself provides key tools that support and reinforce the reform process in a country aspiring to full membership, thereby strengthening its institutional capacity and economic foundations. Faster institutional and economic convergence, including faster convergence to the European central bank values, will also mean faster integration into the European family. That is why we, at the National Bank, have been strengthening our capacity through various modalities, often with direct EU support using the available tools.

7/15  Implementation of Basel III  I have previously referred to the need for banks to plan their future capital requirements, whether as a result of their business projections or of regulatory changes. In this connection, the importance of strengthening, as far as possible, current capital levels should be interpreted against the background of the challenge – a further challenge – entailed by the entry into force of the final stage of Basel III. Last week the EBA published an update of the estimated impact that the implementation of the outstanding elements of Basel III will have on European Union (EU) banks. According to this estimate, risk-weighted assets (RWAs) will increase in the EU as a whole by 24.4%, meaning additional capital totalling € billion in order to respond to new needs. Naturally, we should qualify these figures. Let us not forget that they reflect estimates made under conservative assumptions that banks will not adjust their portfolios to lessen the attendant impact. The EBA itself indicates that needs would fall to € billion if banks decided to retain all their profits during the transitory period. The reforms will not affect all banks equally. Large banks, in particular those that use internal models (IRB), will be most affected, with the impact being restricted to an 11.3% increase in RWAs for medium-sized banks and of only 5.5% for the smallest banks. The main impact will stem from the application of the regulatory floor for those risk-weighted assets calculated using the internal ratings-based approach.
In fact, central banks contribute to financial stability. But improved coordination and institutional innovations, while necessary, are not sufficient to make the euro area economy more resilient to adverse shocks. To enhance the adjustment capacity of the euro area economy, the current situation should serve as a catalyst for the resolute implementation of the necessary reforms. This would enable the Member States of the EU to fully exploit the benefits of economic and financial integration, with positive effects on growth potential and job creation in the euro area. Having said all this, we should not forget how Europe would look today without the euro. An issue that was only marginally addressed during the conference. It goes without saying that the euro area countries would be significantly worse off. Multiple crises would arise simultaneously. Currency crises would go hand in hand with banking crises and real economy disruptions at country level. These currency crises might also spill over to other countries in the region. Not to forget political tensions between countries. By eliminating contagion via the exchange rate channel, the euro has mitigated the risk of contagion stemming from national economic or financial crises. In this sense, the euro has been a very important stabilising element in difficult times. BIS Review 139/2008  3  It is therefore not surprising that many central and eastern European countries would like to join the euro area on a fast-track procedure to be better shielded from global financial tensions and crises.

Jon Nicolaisen: Challenges for the payment system Speech by Mr Jon Nicolaisen, Deputy Governor of Norges Bank (Central Bank of Norway), at the annual conference on payments systems, hosted by Finance Norway, Oslo, 16 November 2017. * * * Please note that the text below may differ slightly from the actual presentation. Introduction The payment system is changing along a number of dimensions. These changes will not only have an impact on the way we make payments, they will most probably also contribute towards promoting and even accelerating the structural changes we have already seen in the financial industry. Today, I will briefly outline some of the most important challenges we are facing. We can perhaps call the sum effect of these challenges a change programme. For this programme to succeed, cooperation is necessary, both within the financial industry itself and between the business community and the authorities. The authorities and the financial industry largely have coinciding interests. We all share the same aim: that Norway will continue to have an efficient, robust and modern payment system. PSD2 and new payment service providers In recent years, the EU has issued a number of regulations which we must adhere to. The revised Payment Services Directive (PSD2) is particularly important. The purpose of PSD2, together with other regulation, is to secure cheap, modern and efficient payment services. PSD2 will enter into force in the EU in two months’ time. A consultation process has been initiated on proposals to implement the directive in Norwegian law.