samchain/econo-pairs-v1 huggingface dataset:
In 2018, an FT survey of banks around the world provided evidence of a cautious approach being taken by firms.5 And according to a McKinsey survey of financial and non-financial firms, most barriers to the more rapid adoption of AI were internal to the firms themselves: poor data accessibility; lack of suitable IMF (2019) ‘Global Financial Stability Report April 2019’ Carney, M., (2019) ‘AI and the Global Economy’ 4 IIF (2018) ‘Machine Learning in Anti-Money Laundering’ 5 FT (2018) ‘AI in banking reality behind the hype’ 2 3  3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  technology infrastructure; and a lack of trust in the insights of AI, for example.6 Despite the plethora of anecdotal evidence on the adoption of AI/ML, there is little structured evidence about UK financial services. To gather more evidence, the Bank of England and the FCA sent a survey in March to more than 200 firms, including the most significant banks, building societies, insurance companies and financial market infrastructure firms in the UK. This is the first systematic survey of AI/ML adoption in financial services. The survey is focused on building our understanding of key themes. First, the extent to which firms have adopted, or are intending to adopt, AI/ML within their businesses and what they regard as the most promising use cases. Second, the extent to which firms have clearly articulated strategies towards the adoption of AI/ML.

Managing Machines: the governance of artificial intelligence  Speech given by James Proudman, Executive Director of UK Deposit Takers Supervision  FCA Conference on Governance in Banking 4 June 2019  I am very grateful to Philip Sellar for preparing these remarks, and to Sadia Arif, Jamie Barber, Jas Ellis, Magnus Falk, Orlando Fernandez Ruiz, Anna Jernova, Carsten Jung, Tom Mutton, Lyndon Nelson, Jennifer Nemeth and Oliver Thew for very helpful advice and comments. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction Consider the well-known story of one Big Tech company’s attempt to use artificial intelligence to improve the efficiency of its staff recruitment. The machine learning system reviewed job applicants’ CVs with the aim of automating the search for top talent. The company’s experimental hiring tool used artificial intelligence to give job candidates scores ranging from one to five stars. Within a year, the company realised its new system was not rating candidates for software developer jobs and other technical posts in a gender-neutral way. That is because the computer models were trained to vet applicants by observing patterns in CVs submitted to the company over a 10-year period. Most came from men, a reflection of male dominance across the technology industry. In effect, the company’s system taught itself that male candidates were preferable. It penalised CVs that included the word “women’s” as in “women’s chess club captain”. And it downgraded graduates of two all-women’s colleges.
Now that the Basel Committee is completing Basel III and the minimum requirement will thus have better cover, it is also reasonable that national authorities where necessary review their national capital requirements. That being said, I would like to stress that the Basel Committee’s work involves establishing a global minimum standard that ensures that banks around the world are better equipped to manage losses. Having a regulatory framework that is robust and that is implemented will play a decisive role in reducing the risk that we will have to experience further financial crises that result in large production losses, high unemployment and permanently lower growth. 2  See, for instance, BIS (August 2010), The long-term economic impact of stronger capital and liquidity requirements 3 See, for instance, BIS (December 2010), Assessing the macroeconomic impact of the transition to stronger capital and liquidity requirements 4 Gambacorta and Shin (2016)  4 [5]  References BIS (August 2010), The long-term economic impact of stronger capital and liquidity requirements BIS (December 2010), Assessing the macroeconomic impact of the transition to stronger capital and liquidity requirements Gambacorta, Leonardo and Hyun Song Shin (2016), Why bank capital matters for monetary policy, BIS Working Paper No. 558  5 [5]

This retail banking model was under debate before the financial crisis broke out in summer 2007, and many analysts considered it obsolete. However, it has proved to be more resilient in the current situation than the originate-to-distribute model which was used intensively in certain banking systems, and lies in fact at the heart of the crisis. Other considerations aside, since the institutions hold on to the risks originated, the perverse incentives associated with the originate-to-distribute model have not been generated in the extension of credit and in its subsequent monitoring. A second factor why the international financial crisis did not directly impact the Spanish banking system has been the Banco de España’s prudent regulation and supervision. I can offer two widely known and acknowledged examples. The first refers to supervision of credit institutions. The broad scope of this supervision acted as a deterrent for the creation and use of certain off-balance sheet vehicles. The second example refers to the area of regulation and, in particular, a system of provisions characterised by very demanding specific-purpose provisions and, especially, dynamic provisions. Under this latter type of provisioning, which has been in force in our system since mid-2000, latent risks and losses in upturns must be recognised, with the result that their build-up on banks' balance sheets has an immediate effect on institutions’ income statements. Obviously, the above-mentioned measures have not been sufficient to isolate Spanish institutions from the financial crisis.
Just as problems originating on a particular sector of the economy can escalate into general macroeconomic imbalances, so financial market imbalances in one financial institution or one country can disrupt other financial institutions or countries. Collaboration between home-host supervisors is therefore a must, but I would argue that probably more can be done in this regard. My third message concerns the role of anchors in the design and implementation of macro-prudential policies. Monetary policy is made credible from the clear focus on a transparent measure of price stability (CPI inflation) which in turn increases the accountability of the central bank pursuing it and ultimately its operational flexibility. Financial stability is inherently a more difficult concept, even on a theoretical level, but I think more should be done to quantify the term and unify its understanding. This would allow for more transparent communication and increased public support for the central bank’s action. I will now expand on these issues. 1. Price stability and macro-prudential measures  A panoramic glance at the experience of central and eastern European economies with the latest crisis would indicate a broad range of outcomes. While this might look normal at first view, it is worth remembering that CEE countries share quite a few commonalities in their economic and financial structures. Furthermore, they were hit by the same type of external shock, at exactly the same time. One has thus a fair approximation of a controlled experiment on the role of macroeconomic policies before and during the crisis.

And finally, I would also like to thank the Parliament of Iceland, particularly the Economic Affairs and Trade Committee, for their collaboration. BIS central bankers’ speeches  5
Page 3/4  Continued influence on general economic debate This leads me to the third reason for honouring Otmar today, which is his continued influence on general economic debate. To use a sporting analogy: while, in his younger years, Otmar is said to have been an excellent sprinter, he is actually a marathon runner. He shows no signs of slowing down. And his voice is widely heard. One very important issue for him is central bank independence. He argues that central banks should be aware of what they can do and what is beyond their influence. And they should communicate this limitation to the public. If they promise more than they can deliver, they will undermine their credibility. Otmar is particularly concerned about central banks taking on too many tasks for which they have no mandate. This puts their independence at risk. I completely agree. Central bank independence will only endure as long as the public is convinced of its benefits, and trust that the central bank is exercising its power responsibly. I am certain that central bank independence is essential, both for maintaining price stability and for ensuring stable and healthy economic growth. However, it is not a given. Rather, the support for central bank independence must continuously be earned anew. Today, Otmar will speak about central bank communication, another very important aspect of central banking. This has attracted a lot of attention in the literature over the last two decades.

Opening Address SEACEN-BIS High-Level Seminar Veerathai Santiprabhob, Governor of the Bank of Thailand Bangkok, Thailand 15 September, 2018 Governor Subbarao, Deputy Governors of SEACEN central banks, Executive Director Genberg, Members of SEACEN Executive Committee, Executives from the BIS, Distinguished participants and speakers, Ladies and gentlemen, Good morning. I am delighted to welcome all of you to the Bank of Thailand for the SEACEN-BIS High-Level Seminar. The theme of this seminar is Digital Technologies, Financial System and Central Bank Policy. These are very important topics, especially for the members of the SEACEN Executive Committee who will play critical roles in shaping strategic direction of the SEACEN and how its programs evolve over the years. The impact of rapid transformation of technology is powerful and farreaching. Advancement in information technology has given rise to various data technologies and network platforms, changing many facets of our lives and helping uplift productivity for firms and individuals. These developments have led to greater connectivity between nations, cultures, and people and break down the barriers of international trades, supply-chains, and capital flows. At the same time, these digital transformations, along with new landscapes they introduced, bring new forms of risks for firms and individuals and pose challenges for central banks. Firms will face greater operational risks from IT transformation and cyber threat while being at risk of increased competition and disrupted business models.
As Securities & Exchange Commission Chairman Arthur Levitt Jr said recently, “No government agency can protect you from your own foolishness”. Our dot-com mania is much milder, but Singaporeans too are carried along by the general enthusiasm for tech stocks. MPs have already expressed concern about SGX’s more liberal listing rules, because they fear the public does not understand the risks, and may even believe that the government approves of the companies, or else it would not have allowed Singaporeans to invest in them. Much as we hope to prevent the dot-com enthusiasm from getting out of hand, we cannot go back to merit regulation, judging the business merits of IPO candidates. The surest form of investor education is to get burnt. But we hope the lesson, if it comes, will not be too painful. MAS As the regulator, MAS must continue to build up its expertise and new skills, to better understand and recognise the different types and magnitudes of risk faced by financial institutions. This will equip us to assess the adequacy of systems and capabilities set up by financial institutions to manage risk, and to craft appropriate supervisory responses. We seek to regulate with a lighter touch, but a lighter touch does not mean doing less. Risk-focused supervision is more difficult to do than taking a one-size-fits-all approach. It demands much greater understanding of the business and risk profile of the institution and the exercise of judgement as to where dangers may possibly arise.

Mugur Isărescu: How can the EU generate a virtuous circle in the Black Sea Region – the case of food and energy security Speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, opening the European League for Economic Cooperation (ELEC) conference, Bucharest, 26 April 2016. *  *  *  Commissioner, Ministers, Your Excellencies (Ambassadors), Distinguished guests, Ladies and gentlemen, I am honoured to open this ELEC conference that will focus on how the EU can generate a virtuous circle in the Black Sea Region in the case of food and energy security. It is the fifth time that the National Bank of Romania is the host for an ELEC conference. The fact that we gather here, today, not at the National Bank of Romania office, but at the Romanian Banking Institute is quite significant: this establishment is a hub of financial education committed to passing knowledge both to experts and non-experts. I wish this to be a substantial debate in an open and insightful manner, which will cast more light and clarity on the topics you are going to discuss. I am pleased to welcome Miguel Arias Canete, Commissioner for Climate Action and Energy; and Rudi Mögele, Deputy Director General, DG Agriculture and Rural Development. They will be keynote speakers today. Allow me to greet Baron Bernard Snoy, President of ELEC International and Jerry van Waterschoot, Secretary General of ELEC International.
Carry trade-related inflows into the bond market did cause some disruption of monetary policy transmission in summer 2015 and last winter and could have posed risks for financial stability further ahead. For this reason, and also to prevent the development of a new “overhang” following the offshore króna auction in June 2016, it was considered appropriate to take action to mitigate these inflows. Since then, they have largely stopped. However, there has been no let-up in foreign currency inflows in recent months, and by the end of last week, the Central Bank had bought foreign currency in the amount of 160 b.kr. since the beginning of July and the exchange rate had risen by nearly 12% over that same period. The available data indicate that foreign currency inflows are to a large extent related to the trade surplus, which has been quite large, owing partly to growth in tourism and positive terms of trade, plus foreign investors’ increased interest in direct investment in the Icelandic economy. The banks’ and other Icelandic firms’ improved access to foreign credit could play a role as well. On the other hand, speculative  7  flows related to the interest rate differential appear to account for only a small part of the inflows. Another important factor is that liberalisationrelated outflows are still limited. It should be noted, though, that balance of payments figures for Q3/2016 could change the picture somewhat, but they will not be available until the beginning of next month.

Turning to the identification of the problems posed by part of our banking system, the government and Parliament reacted promptly. As early as 2009 the FROB (Fund for the Orderly Restructuring of the Banking Sector) legislation was approved, allowing the start of the restructuring of an extensive number of savings banks. And, whenever necessary, the government and Parliament have not hesitated to adopt further legislation so as to speed through and conclude this process, as evidenced by the approval of the Savings Bank Law in 2010 and, more recently, the passing of the Royal Decree-Law on the capitalisation of our credit institutions. The fact these regulations have been approved with an acceptable degree of Parliamentary consensus is most positive. In this case, as in that of cutting the deficit, it is expected that savings bank restructuring will be completed how and when the Parliament has decreed. Despite affecting a limited part of the banking system, the restructuring has generated such noise that the doubts as to whether the legislator should have adopted more drastic solutions are understandable. But I  BIS central bankers’ speeches  1  should say that some of the alternatives, such as injecting capital into the savings banks without making this conditional upon their restructuring and resizing, might have entailed more disadvantages than advantages, compared with the option actually chosen by the legislator.
By the time of the Industrial Revolution, it had levelled-off. Rapid social capital accumulation provided a foundation for growth. Sociology nurtured technology. With some interruptions, notably the two World Wars of the 20th century, those trends towards lower levels of violence in society have continued to the present day. For example, war deaths have been falling secularly since the 1940s (Chart 10). This is consistent with a continuing accretion of social capital. 29 Although hard to quantify, this too is likely to have provided a tailwind to growth in the modern era. Infrastructural and institutional capital are widely believed to have supported the growth process. 30 England was the birth place of the Industrial Revolution. Its parents, arguably, were English institutions well into adolescence at the dawn of the Industrial Revolution: a parliamentary system from the 11th and 12th centuries; a legal and judicial system from the 12th and 13th centuries; a central bank, the Bank of England, from the end of 17th century. The government’s role, as an institution in society, also rose rapidly prior to the Industrial Revolution. Chart 11 plots government spending as a fraction of national income in the UK since 1200. Until around 1600, government accounted for only 1–2% of national income. In the subsequent two centuries government came of age: its share of spending rose 10 or  26  For example, Fernald and Jones (2014). 27  Hall and Jones (1999). 28  For example, Pinker (2012). 29  Pinker (2012). 30  For example, Tabellini (2010).

40 The invention of the printing press by Guttenberg in around 1450 led to an explosion in book production. It is estimated that there were more books produced in the 50 years after Guttenberg than in the preceding 1000 years. What followed was much more than a technological transformation. Books contributed to a great leap forward in literacy levels, boosting human capital. More speculatively, they may also have re-wired our brains. Nicholas Carr argues that the changes brought about by the printing press, and other information media, may have re-shaped our minds. 41 Books laid the foundations for “deep reading” and, through that, deeper and wider thinking. Technology was, quite literally, mind-bending. It has been argued that this re-wiring stimulated the slow-thinking, reflective, patient part of the brain identified by psychologists such as Daniel Kahneman. If so, it will have supported the accumulation of intellectual capital – creativity, ideas, innovation. Technology will have first shaped neurology and then neurology technology, in a virtuous loop. Slow thought will have made for fast growth. 36  For example, Clark (2009). 37  Wang et al (2011). 38  Mullainathan and Shafir (2014). 39  Bannerjee and Duflo (2012). 40  Carr (2011). 41  Carr (2011). 8  BIS central bankers’ speeches  It is possible to construct a quasi-neurological explanation of much-earlier shifts in growth. The world’s growth journey appears to have commenced, in earnest, around the time modern homo sapiens replaced Neanderthal man. Maybe that was no accident.
Avoiding or resolving liquidity problems is not just a matter of ensuring adequate aggregate liquidity; it also means ensuring that liquidity can be, and is, distributed effectively round the system. This was illustrated by the events of 9/11, when the US money market was temporarily unable to distribute liquidity to the banks that needed it. On that occasion, for example, the Federal Reserve injected considerable liquidity, more than $ via a combination of daylight overdrafts, discount window  BIS Review 79/2005  3  lending, and general market support. 9/11 also highlighted the importance of central banks being able to lend directly to solvent institutions facing a liquidity crisis. Under stressed conditions, and with the associated uncertainties, attempts by a perfectly sound bank to borrow unusually large amounts from the market, even against good quality collateral, have the potential to raise, or exacerbate, doubts about that bank’s solvency. But a solvent bank that is in need of liquidity can safely reveal its need to the central bank without precipitating a crisis in market confidence; uniquely, the latter is not at risk of experiencing a run, and so will not overreact in an effort to protect its own balance sheet. In many countries ‘automatic’ direct liquidity provision against pre-defined acceptable collateral is hard-wired into the operational framework for monetary policy implementation through so-called ‘standing facilities’. In the UK we are broadening the range of firms to whom we can supply liquidity in this way.

To address this, the Fair and Effective Markets 13  Review recommended the creation of a FICC Markets Standards Board (FMSB) , with a mandate to:   To improve the quality, clarity and market-wide understanding of wholesale FICC trading practices;    Produce guidelines, standards and other materials to promote good conduct; and,    Undertake horizon scanning by periodically reviewing wholesale FICC markets for emerging risks. The FMSB has already made significant progress in engaging a wide range of market participants, which is a testament to the leadership of Elizabeth Corley as interim Chair and Mark Yallop who took over as Chairman in July.   Over 50 firms have signed up including 17 G-SIBs, some of the largest asset managers in the world, and many corporates and treasurers who are major users of FICC markets.   The FMSB has published draft guidance on ‘Reference Price Transactions in Fixed Income Rates Markets’ and ‘Binary Options in Commodities Markets’ that members must adhere to on a comply or explain basis; and    Other jurisdictions are starting to take note – the Australian Financial Markets Associations’ members have agreed to implement the FMSB’s standards and the South African Reserve Bank has been in touch about setting up its own FMSB equivalent. Many global banks are telling us they intend to apply these standards to all their operations. The internationalization of these market standards is critical for creating a level playing field and preventing “ethical drift” across different jurisdictions.