samchain/econo-pairs-v1 huggingface dataset:
First, the larger the intermediation offered by the central bank, the smaller, ceteris paribus, the incentives are for banks to reduce liquidity risk (for example, to reduce the maturity mismatch of assets and liabilities). After all, they can turn to the central bank if they need to. Of course, while central bank intermediation increases the incentives for banks to take liquidity risk, it also increases the liquidity insurance available to banks. That is, as long as a bank does not adjust its balance sheet when the central bank offers more intermediation, its net liquidity risk exposure may in fact decrease due to the increased liquidity risk insurance provided by the central bank. But which effect is stronger: the incentive or the insurance effect? Second, larger central bank intermediation can crowd out market activities. This might be perceived as a cost-reducing development by private banks. If the central bank lends larger volumes in longer-term operations, this might provide a boost to private lending at the same maturities: some banks might consider offering funds in the term money market only if they themselves can refinance such activities by participating in longer-term central bank operations. This may make term money markets more liquid in the end. However, this is not what the Japanese authorities observed in the first half of this decade.

This, in turn, has reduced the risk of lending out liquidity in the money market and thereby lowered the liquidity risk premia. 2 In crisis times, banks the world over learnt what Japanese banks learnt back in the 1990s: that they could manage their liquidity requirements – perhaps more comfortably and at lower cost – through central bank intermediation rather than via their traditional money market activities. Central banks – for their part – have seen that their collateralised lending has made them key market makers at a time when markets were disappearing. 3. The role of central banks in money markets  In light of all these developments we may well ask whether the new market-making role of central banks will continue. If central banks intermediate large volumes in normal times, they may not need to change their operational framework substantially when a liquidity crisis suddenly hits. Larger intermediation could anchor expectations and make market dynamics less subject to threshold effects. Does this suggest a new steady state – beyond the setbacks and progress of the current crisis – in which central banks will become a larger counterparty to the financial system as a whole? It is too early to say. Nevertheless, let me share with you some preliminary thoughts on the future role of central bank intermediation. Let me say up front that central bank intermediation involves subtle trade-offs. Let me list some of them.
It is the commission’s assessment that in their current form and size, the big banks are clearly systemically important. The commission of experts published its interim report at the end of April. The “too big to fail” issue is to be addressed through a package of key measures encompassing special requirements for systemically important banks in the areas of capital, liquidity and organisational structure. These key measures are compatible with the approach discussed by the Financial Stability Board. Besides those proposed by the commission of experts, other measures being considered at the international level include the breaking-up of big banks, the prohibition of certain activities such as proprietary trading, and the taxation of balance sheets and transactions. The SNB fully supports the proposals put forward by the commission of experts to date. The overall direction is correct. What is important now are the details of the measures. Our position is clear. It is essential that capital requirements be significantly increased and that they rise in line with the degree of systemic importance of a bank. This is the only way to ensure that the banks internalise the risks which, until now, they have been able to pass on to the general public, to some extent. Moreover, progressive capital requirements should create an incentive for banks to reduce their systemic importance, with its associated risk potential.

Thus indirect risks pose a serious threat to Swiss banks, even if direct risks – measured by the direct claims on those countries particularly affected until now – are moderate. In this climate, it seems inappropriate to us that banks increase their appetite for risk. Reforming the regulatory framework / “too big to fail” A year ago, we emphasised the urgency of alleviating the “too big to fail” issue. Where do we stand today? Allow me to state clearly right now: the “too big to fail” issue will not resolve itself. Last year, the big banks significantly reduced their balance sheets – a move explicitly welcomed by the SNB. The “too big to be rescued” issue has thus also receded somewhat. However, there has been hardly any alleviation of the “too big to fail” issue. Big bank liabilities, which at the end of 2008 were still almost six times Swiss GDP, were reduced by the end of 2009 to just over four times GDP. Nevertheless, the big banks’ share of markets relevant to the Swiss economy – and hence their systemic importance – remains just as high as before: the big banks grant a third of domestic loans and hold a third of domestic deposits. In other words, Switzerland is still vulnerable, and the need for action remains great. This opinion is shared by the commission of experts appointed by the Federal Council on “Limiting the economic risks posed by large companies”, of which I am Vice Chairman.
Much of the Basel Committee’s work on big “ideas” that respond to the shortcomings in the regulatory framework identified by the financial crisis is reaching the end stage. The capital rules are set (and, in an increasing number of jurisdictions, coming into force), and the revisions to the LCR have recently been agreed. In 2013, we will seek to set out the specification of the backstop leverage ratio, and the NSFR will be refined between now and the end of 2014. Clearly, we still have work to do, but increasingly it is about getting the technical details correct rather than new far-reaching ideas. Even when the Committee’s policy response to the crisis is complete, much more work will still be needed. Implementation needs to be seen as an integral part of the reform agenda, not a sideline activity. As we examine this issue to a depth that it has not previously been examined, we will inevitably find things that need improvement. Turning a blind eye to these, as may have occurred in the past, is not an option – we need to persevere and find those areas where additional modifications to the regulatory framework are needed to ensure it is effective. If we do not work to improve implementation, we will not embed the reforms into domestic banking systems in the full, timely and consistent manner that is in everyone’s interests. BIS central bankers’ speeches  7

Confining myself to this latter consideration, without a recovery in employment it will prove costlier to further budgetary adjustment, since the increases in revenue will be limited and because turning expenditure around will require an additional effort to offset the necessary increase in unemployment benefit payments. 2  BIS central bankers’ speeches  In any event, budgetary policy is key in circumstances such as the present. As I stated earlier, we are in the middle of a sovereign debt crisis. There is no doubt that the Spanish economy’s vulnerability has a significant fiscal component, although our difficulties are compounded by the persisting downturn – and its dreadful impact on employment – and the still-high dependence on external funding. The budget deficit ended last year at a level of 8.5%, far off the 6% target set in the Stability Programme. And the year-end public debt/GDP ratio was 68.5%, more than 30 pp up on 2007, before the international financial crisis broke. In turn, the deficit targets have been set at 5.3% for 2012 and at 3% for 2013, which entails a most significant budgetary effort. It is crucial, however, to rigorously meet these targets. Attaining them is vital for restoring credibility in the Spanish economy, and here the overall interests of all economic and social agents and all levels of government converge. A high degree of unity and consensus among the respective parties will be pivotal to success in the arduous task ahead.
And, more fundamentally, with economic activity still below pre-crisis trends, whether we have gone too far and whether regulation is now preventing the financial system from doing its job to support growth in the real economy? I imagine this debate will be widespread internationally and will last for some time. In the light of how and why macroprudential policy has developed and where we now are, I would make the following observations. First, we should accept that the complex, interlocking set of reforms of recent years will need fine tuning and adjustment as they are implemented. There will be issues we have to revisit. Indeed, this process is already beginning. The Bank of England and the ECB have together launched a review of the treatment of securitisation. The FPC and the international community is looking at the issue of liquidity in financial markets which many argue has been adversely affected by regulation. Following up the Fair and Effective Markets Review, the Bank of England will host an Open Forum to take stock of the reform agenda in financial markets. And the European Commission has just launched its review of the EU regulation on bank capital. Indeed, given the depth and complexity of the financial crisis and the corresponding depth and complexity of the reforms, we should expect rather than be surprised that we will need to refine and adjust some of the regulatory reforms.

19 For loan markets, SC-STS will publish by April 2021 market guidance on the transition of bilateral corporate and retail loans, and set out further guidance on market mechanisms for converting legacy syndicated and hedged loans by the third quarter of this year. This is expected to rely on active SOR to SORA transition in the derivatives market to establish relevant pricing references for the transition of syndicated and hedged loans, where coordination across lenders and borrowers is essential. 20 The key message is this: Banks should actively engage their corporate customers to pro-actively undertake legacy transition wherever possible by end 2021. While some customers may be inclined to adopt a wait and see approach, particularly since LIBOR and SOR discontinuation could be extended to mid 2023, it is important to bear in mind that SOR derivatives liquidity will start to decline in 2021. 21  There are two reasons for this: Liquidity in derivatives will start shi ing to SORA, particularly from April onwards, given the stop to new SOR cash products, and as all hedges on new cash product shi to SORA. Likewise, with SC-STS considering a cessation timeline for new SOR derivatives, likely before end-2021, market participants should expect SOR liquidity to decline further as  https://www.mas.gov.sg/news/speeches/2021/pushing-ahead-with-sor-sora-transition-in-2021  5/7  12/02/2021  "Pushing Ahead with SOR-SORA Transition in 2021" - Keynote Speech by Mr Leong Sing Chiong, Deputy Managing Director (Markets …  key banks will not be able to undertake new SOR derivatives transactions.
For example, asset fire sales dynamics that negatively impact market prices or a loss of confidence in the industry during periods of uncertainty or distress are examples of “externalities” with far-reaching effects on the financial system.7 Moreover, those costs and benefits will be realized in the future and thus need to be assessed ex ante from a probabilistic perspective. The official sector includes all of these costs and benefits to society in assessments of policy efficacy. This makes evaluating trade-offs and assessing effectiveness difficult, and suggests that simple assessments are likely to be incomplete. Policy assessment requires a rigorous evaluation of a broad range of outcomes, and an important part of the ongoing dialogue in conferences like this one is to continue to develop the conceptual frameworks and to study the data in order to make the most meaningful assessments of policy effectiveness. A Look at Bank Performance I will now discuss two perspectives on bank performance since the financial crisis that serve as rough proxies for the resilience of the industry and the provision of financial services. This is clearly not a rigorous test of whether specific regulations are optimal, but provides some indicative results about trends in resiliency and financial services. I will focus on accounting metrics from the balance sheet and income statement, but one could also turn to market data to assess resiliency.

Many countries have had to reallocate budgets, issue debt, or rely on foreign aid to finance immediate relief and reconstruction efforts. Most have yet to develop robust public disaster risk financing strategies using ex-ante risk financing solutions, which includes setting aside reserves, establishing contingent credit, and tapping on insurance and capital markets. 8. Several ASEAN countries, however, have made significant strides in the right direction. For instance, Philippines has put in place a disaster risk management strategy since 2010, and implemented a parametric insurance programme covering 25 provinces, which will provide rapid liquidity for the government to enable rebuilding and recovery efforts when disaster strikes. It is now working with the World Bank on a sovereign catastrophe bond to complement the insurance programme, which will provide cover for more extreme events. Over the years, Indonesia has consistently increased its budget allocation for disaster management. Most recently, Indonesia has adopted a new disaster risk financing and insurance strategy, which encompasses the government insuring government buildings from this year. A Coordinated approach to Disaster Risk Financing 9.
Should monetary policymakers have sacrificed 1 ½ million jobs for the sake of an extra 1 or 2% of productivity? Hand on heart, I can tell you this one would not knowingly have done so. Of course, this experiment is only illustrative and is based on a number of simplifying assumptions. For example, it assumes there is no adverse effect on the output of firms who do not go bust but who nonetheless find their cashflows squeezed. This would tend to raise the output and employment cost of higher interest rates and make the terms of trade for productivity improvements less favourable still. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  Acting in the opposite direction, gazelle firms may be able to borrow to avoid bankruptcy in the event of higher interest rates – their solvency threshold might be higher than for zombie companies. If we assumed instead that only the lowest-productivity firms went bust, the boost to productivity is around 3% (Chart 24d). This is more material, but would still need to be weighed against the significant output and employment cost. The Dispersion of Productivity and Wages  A final use to which the distributional data can be put is to analyse whether rising dispersion in productivity among firms is mirrored in rising dispersion of wages among households. Have productivity differences been a contributor to rising income inequalities?

Gordon, R (2014), ‘The demise of US economic growth: restatement, rebuttal and reflections’, NBER Working Paper No. 19895. Gorton, G and Ordonez, G (2015), ‘Good Booms, Bad Booms’, Manuscript, University of Pennsylvania. Greenstone, M and Mas, A (2012), ‘Do credit market shocks affect the real economy? Quasi-experimental evidence from the great recession and 'normal' economic times’, Technical Report 12-27, MIT Department of Economics Working Paper. Haldane, A, Brennan, S, and Madouros, V (2010), ‘What is the contribution of the financial sector: miracle or mirage?’, in Turner A and others, The Future of Finance: The LSE Report, London School of Economics and Political Science. 40  All speeches are available online at www.bankofengland.co.uk/speeches  40  Haldane, A (2016), ‘One car, two car, red car, blue car’ Speech given at Materials Processing Institute, 2 December. Haskell, J and Westlake, S (2016), ‘Are intangibles worsening the productivity gap between leading firms and laggards?’, 2 June, blog post available at http://www.theintangibleeconomy.com/. Helpman, E and Trajtenberg, M (1998), ‘A Time to Sow and A Time to Reap: Growth Based on General Purpose Technologies’ in Elhanan Helpman, (ed.) General Purpose Technologies and Economic Growth, MIT Press. Hsieh, C and Klenow, P (2009), ‘Misallocation and manufacturing TFP in China and India’, Quarterly Journal of Economics, Vol 124(4), p.1403-1448. Hoekman, B, K, Maskus, K, Saggi (2004), ‘Transfer of technology to developing countries: unilateral and multilateral policy options’, Institute of Behavioural Science Working Paper PEC2004-0003.
Despite the important progress recorded, the overall employment rate in the euro area remains low by international standards (64.5% in the euro area compared with 72% in  1  European Commission – AMECO database. Hours worked data from OECD. BIS Review 82/2007  1  the US in 2006) and the unemployment rate is still clearly too high (7.9% compared with 4.6% in the US on annual average in 2006 and 7.0 % to be compared to 4.5 % in May this year). It has to be noted that in 2006 the estimated number of annual hours worked in the euro area was 1604 compared to 1804 2 in the US. Moreover, while the prime-age male employment rate in the euro area is comparable to that observed in the United States, the disparities remain important when we look at the youth, female and older worker employment rates. In 2006 the female employment rate was 56.5% in the euro area and 66% in the US, the older workers employment rate was 41.7% in the euro area and 61.8% in the US, and youth employment was 37.1% in the euro area and 54.2% in the US. These features appear to be consistent with an “insider-outsider” characterisation of the European labour market, where structural impediments prevent those groups “at the margin” from participating in the labour market. The performance of the labour market in Finland has also been quite impressive these last years with the overall employment rate increasing from 62.4% in 1996 to 69.3% in 2006.

Jean-Claude Trichet: How can we increase growth potential in Europe? Speech by Jean-Claude Trichet, President of the European Central Bank, at the Suomi Areena 2007, Pori, Finland, 20 July 2007. *  *  *  Dear Governor Liikanen, I would first like to thank you very warmly for inviting me on the occasion of the “Suomi Areena 2007” event. It is a pleasure and a honour to be here today and to share with you my views on “How can we increase growth potential in Europe”. In light of the partly disappointing euro area economic performance in the past, it is a major policy issue. By contrast, the impressive performance of the Finnish economy, with output and productivity growth over the second half of the 1990s among the highest in the European countries, [Real GDP and hourly labour productivity grew on average by 3.8% and 2.7% respectively between 1996 and 2006], offers a good illustration of what could be done to increase growth potential in Europe. The transformation of the Finnish economy over the last decades represents one of the examples of the “knowledge based-economy” taking hold in Europe. Against this background, I will first review the past economic growth performance of the euro area in comparison to the US and focus on some of the underlying factors of potential output growth. Then I will elaborate on the reforms which I consider essential to increase the potential growth rate of Europe.
Starting from the fact that the role of central banking in the development of the economy is best seen in the development of the institution itself, please allow me to draw your attention to some of the more significant moments of that development. At the very beginning, the Bank was conducting only a few central banking operations: distribution od cash, payment operations, control, i.e. in today's language, supervision of banks. Its first manager was Dr. Todor Mirovski, at that time manager of Makedonska Stopanska Banka, while from the beginning of 1947 until June 1950, Aleksandar Bogoev. From a functional viewpoint, the central banking in the past 60 years may be conditionally divided into three periods. We could call the first period pre-institutional (1946-1970), the second was a period of formal institutionalization (1971-1991), and the third was a period of monetary independence (1992-2006). We denote the first period as pre-institutional since there was an institution established only on a federal level - central bank. And, as you are well aware, the main feature of post-war life in all spheres, including banking as a whole, was centralization. Consequently, all communal banks immediately  BIS Review 100/2006  1  became branches of the National Bank of, at that time, Federal Yugoslavia - Head Office of NRM, engaged in attracting funds, extending credits in the amount of the funds attracted, performing limited activities in the international payment operations, performing vault activities for executing the budgets of the local units, etc. The Head Office, i.e.

Thomas Jordan: What are the consequences of the war in Ukraine for the SNB's monetary policy? Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the 114th Ordinary General Meeting of Shareholders of the Swiss National Bank, Berne, 29 April 2022. * * * Madam President of the Bank Council Dear Shareholders Dear Guests I would like to warmly welcome you all to our Annual General Meeting, and I am delighted that this year we are able to meet in person again. The geopolitical situation has changed fundamentally in the past few months. Russia’s attack on Ukraine has shaken us all. Our thoughts are with the victims of this terrible war. Considerations of the economic consequences pale by comparison with this suffering. Nevertheless, such deliberations are also important for the citizens of Switzerland, and the Swiss National Bank is therefore working intensively on addressing the impact the war will have. On the one hand, we have to properly contextualise the immediate economic effects. On the other hand, we also have to address questions pertaining to the longer term. I will begin my speech by looking at the closely interconnected global economy as we knew it until just recently, the gains in prosperity it brought, and what it meant for monetary policy. I will go on to explain how the consequences of the war that can already be felt are influencing our current monetary policy.