samchain/econo-pairs-v1 huggingface dataset:
Yves Mersch: Finance in an environment of downsizing banks Keynote speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Shanghai Forum 2014 “Asia Transforms: Identifying New Dynamics”, Shanghai, 24 May 2014. *  *  *  Ladies and gentlemen, Thank you very much for inviting me to speak today. Europe and Asia have an increasingly symbiotic relationship. In 2013 total EU trade with Asia reached € trillion, almost double the value recorded a decade ago and representing over one-third of total EU trade. At the same time, the EU accounted for almost 30% of Asian trade last year, far ahead of any other trading partner, including the United States. The EU is also a major investor in Asia, and vice versa. Around 20% of EU outward investment goes to Asia, while 20% of inward investment originates in the region. In other words, the economic situation in Europe today has important consequences for the growth trajectory of Asia – and this is a relationship that will likely only increase in strength in the future. I would therefore like to use my remarks to discuss developments in Europe as part of the growth equation for Asia. Asian policy-makers know best the domestic challenges that face them and the types of solutions that are needed. The European situation is no doubt a complex one, but if there is a common factor in the crisis and its persistence, it is the difficulties of the euro area banking sector.

Recent research looking at the pre-crisis period suggests that where banks face limited competition in their domestic markets, and firms are more dependent on them, financing constraints for SMEs have been higher.3] Matching credit supply and demand We are already seeing signs in the euro area that a rebalancing towards capital market financing is taking place: as bank credit to corporates has fallen, it has been approximately matched by issuance of corporate bonds. It would nonetheless be naïve to expect this transition towards a new financing mix to occur seamlessly. While on aggregate, euro area credit supply might be sufficient to meet credit demand, I see two factors that might lead to an imperfect match between supply and demand for certain firms. They are the location of those firms and their size. 1  See for example Arcand, Jean-Louis, Enrico Berkes, and Ugo Panizza (2012). “Too much finance?” IMF Working Paper No. 12/161, or Manganelli, Simone, and Alex Popov (2013). “Financial dependence, global growth opportunities, and growth revisited.” Economics Letters, 120(1), 123–125. 2  OECD (2014). “The role of the financial sector for economic growth in OECD and G20 countries,” internal paper prepared for the Economic Policy Committee. 3  Ryan, R., O’Toole, C. and McCann, F. (2014), “Does bank market power affect SME financing constraints”, Journal of Banking and Finance, January. BIS central bankers’ speeches  3  Location In terms of location, the cost of and access to finance in the euro area remains strongly based on national conditions.
In the span of a decade, social media has become a bona fide global marketplace, marketing tool, recruitment platform and social scene. All this points to the double-edged nature of globalisation: While it may have brought people closer together, it also introduces the challenge of promoting greater appreciation of cultural, ideological and sociopolitical diversity. Conclusion Globalisation, once envisioned to be a beacon of unity, has fueled increasing polarisation in recent years. Let’s remind ourselves that in this globalised world, it is important for the contented to appreciate the struggles of the discontented. And, for the discontented to not lose sight of the potential that globalisation holds. And for all of us, to remember – that 75 years after Bretton Woods – the creation of a safe, fair and mutually beneficial global system is still not an easy pursuit. It is, nonetheless, a necessary one. Once again, I would like to welcome everyone to Sasana Kijang. The World Bank, a product of 3/4  BIS central bankers' speeches  Bretton Woods, along with the IMF and WTO, has brought to Malaysia an amazing gathering of thought leaders and experts on globalisation from all over the world. The next two days will indeed be a fine example of globalisation in action. Let me end with a passage from John Maynard Keynes which I think is appropriate for the occasion. “Yet the new economic modes toward which we are blundering are, in essence of their nature, experiments.

On 15 December 2020, the Federal Reserve Board announces it has formally joined the Network of Central Banks and Supervisors for Greening the Financial System, or NGFS. ii Responsible Investment Report of the Banque de France 2019, June 2020. iii Article 3 of the Treaty on European Union. iv Seppänen et al. (2006), « Room Temperature and Productivity in Office Work », LBNL-60952, Lawrence Berkeley National Laboratory, Berkeley, CA. ou Niemelä et al. (2002), « The effects of air temperature on labour productivity in call centres – a case study », Energy and Buildings 34(8), 759-64. v Weidmann, J. (2021), “What role should central banks play in combating climate change?”, Remarks at the ILF conference Green Banking and Green Central Banking: What are the right concepts?, Goethe University Frankfurt, 25 January. vi NGFS (2020), “Survey on monetary policy operations and climate change: key lessons for further analysis”. vii Bolton, P., Després, M., Pereira da Silva, L., Samama, F., Svartzman, R. (2020), “The green swan: central banking and financial stability in the age of climate change”, Bank for International Settlements and Banque de France. viii Objective defined in the Paris Agreement signed by 195 countries, of which the European Union. ix Schnabel, I.
3/4  BIS central bankers' speeches  We are publishing the first issue of the report today and are going to release it on a regular basis, eight times a year, prior to the quiet period. We hope that this material will be interesting and useful to a wide range of readers. 4/4  BIS central bankers' speeches

They will either adjust themselves to the allEuropean standards or are likely to continue operating also transactions of local or specific character, which will not be eligible for processing via the all-European standards. Ladies and Gentlemen, despite turmoil on the global financial markets, the financial market in Poland is developing very fast. However, there are probably serious challenges in the pipeline, related to developments on some markets and to the changing architecture of the financial system in Europe. We have to face those challenges so that future generations of Poles can benefit from the ever better functioning of the financial market in Poland over the decades to come. References Bernanke B., Asset price “bubbles” and Monetary Policy speech before the New York Charter of National Association for Business Economics, 15 October 2002. Bernanke B., Reflections on the Yield Curve and Monetary Policy, Remarks by Chairman B. Bernanke Before the Economic Club of New York, 20 March 2006. Bernanke B., Gertler M., Monetary Policy and Asset Price Volatility, [in] New Challenges for Monetary Policy, a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming 26-29 August 1999. Bernanke B., Gertler M. Should central banks respond to movements in asset prices?, American Economic Review, May 2001. Blinder A., Reis R., Understanding the Greenspan standard, [in] The Greenspan Era: Lessons for the Future, a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming 25-27 August 2005.
In turn, credit institutions provide financing to customers, trusting that they will repay those funds on the terms agreed. Likewise, customers conduct all their business with their banks because they trust them not to sell or reveal any information they have on them as customers. Unfortunately, the bank crisis weakened the general public’s trust in credit institutions. Some strategies followed by certain banks may have made them less customer-centric. I am thinking, for example, of the incentive schemes based, perhaps to excess, on growing business rather than incrementing customer loyalty. In addition, the lack of good practices in the selling of bank products and services has clearly played some part in this loss of trust. One of the most important future challenges we face is to restore and strengthen the industry’s reputation both with investors and customers. The first step to achieve this must be to make simplicity and accuracy a priority in all communications with customers. This includes aspects such as improving the language that is used in relations with customers, refining selling policies and promoting transparency. Allow me, in conclusion, to expand on these points a little further. First, the use of language. The names and descriptions of bank products must not be misleading as to their return and risk characteristics, nor must they be used as misleading advertising tools. Accordingly, terms that offer a false sense of security as to the return or interest that may be obtained must be avoided.

This is becoming a more pertinent issue in the UK as we move into a more normal phase of the credit cycle; credit is beginning to grow again albeit at rates below the pre-crisis peaks. And within the aggregate numbers some sectors are growing relatively quickly. Time-varying macroprudential policy is hard and there is much new ground to be broken. But there is a benefit in ensuring that the financial system maintains resilience as the distribution of systemic risks moves through the cycle and where necessary trying to ensure that such risks do not build up unchecked. I am conscious that I have spent the last half hour talking about the role of policy through time. Einstein, of course, taught us that time was in the end indistinguishable from the dimensions of space: “for us physicists believe the separation between past, present and future is only an illusion, although a convincing one”. There is I am afraid only so much brilliant simplicity an economic policy maker can take. So I fear that for the immediate future at least we will need to maintain that convincing and indeed convenient illusion and set policy accordingly. BIS central bankers’ speeches  7
However, the analysis is less urgent in other countries, where they have not experienced the same rapid decline in the use of cash. While the value of outstanding cash as a percentage of GDP is just over 1 per cent in Sweden, it is 10 per cent in the Eurozone and a good 20 per cent in Japan. Our Nordic neighbours are also conducting similar analyses because of a decline in the use of cash. Norway and Denmark, for instance, have produced reports and analyses on digital central bank money. The Bank of England and the Bank of Canada have published research articles in this field that analyse, for instance, possible motives for central bank digital currencies and their consequences for monetary policy and financial stability. 6 Central banks in some emerging market economies have also shown an interest in central bank digital currencies. These countries’ motives for being interested in central bank digital currency differ somewhat from our own. One motive is that they see the opportunity to broaden access to fundamental financial services to all parts of the population, that is to say, financial inclusion. Other arguments concern reducing the use of cash, which may be regarded as costly and risky. They also point to the negative environmental aspects of cash and to the fact that it enables money laundering and makes it easier for the black economy. 7 The work that is done is not solely theoretical.

News conference  22 September 2022, 10.00 am  Introductory remarks by Martin Schlegel Against the backdrop of current interest rate movements, I would like to give you a brief assessment of developments on the mortgage and real estate markets. Alongside other factors such as construction activity, income and demographics, interest rates have an impact on the real estate market and on demand for mortgages. In turn, mortgage and real estate markets play a key role for banks and financial stability. After a long period of extremely low interest rates, interest rate levels on the money and capital markets in Switzerland have risen substantially since the beginning of the year. As a consequence, interest rates for fixed mortgages have also increased, while rates for SARON mortgages have remained low. Until now, these interest rate developments have had little effect on growth in the mortgage and real estate markets. Prices for single-family houses and privately owned apartments have continued to rise and mortgage volume has also grown further. One possible reason is that actual interest costs for real estate purchases have increased only slightly due to the shift from fixed-rate mortgages to SARON mortgages. By contrast, there are signs of a slowdown in the residential investment property segment. Available data for apartment buildings indicate a slight reduction in prices in the second quarter. Looking ahead, the tightening of monetary policy should also help to ease the risk situation on the mortgage and real estate markets.
This again suggests that there is a role for supervision and regulation in the bubble prevention process. For example, it might be appropriate for the Federal Reserve – working with functional regulators such as the SEC (Securities Exchange Commission) – to monitor and limit the buildup in leverage at the major securities firms and the leverage extended from these firms to their clients and counterparties. Whether there is a role for monetary policy to limit asset bubbles is a more difficult question. On the one hand, monetary policy is a blunt tool for use in preventing bubbles because monetary policy actions also have important consequences for real economic activity, employment and inflation. On the other hand, however, there is evidence that monetary policy does have an impact on desired leverage through its impact on the shape of the yield curve. A tighter monetary policy, by flattening the yield curve, may limit the buildup in leverage. 1 Whether it would be more effective to limit leverage directly by regulatory and supervisory means or via monetary policy is still an open question. But it is becoming increasingly clear that a totally hands off approach is problematic. I also believe we could have done better in our supervision of the large complex commercial banking organizations.

In these two days, discussions will focus on monetary policy, financial stability, economic modelling and forecasting, risk assessment and management, which are all traditional instruments in the central bank toolkit and need to be improved constantly. It is very important to note that, in addition to these traditional topics, the workshop will discuss research in new and important areas such as: digitalization of financial services, structural reforms, healthcare and its implication for central bank objectives and national welfare. Technological developments disrupting traditional labour, financial products and markets, and demographic developments may impose some of the most important challenges to our societies and institutions. Therefore, it is important to study and adequately understand these phenomena. In addition, we are glad and eager to discuss research findings from a number of authors who come from academia, central banks and other research institutions. The ideas and methodologies that are embedded in their research will introduce our researchers and economists to new ideas, will help them extend their research agenda, and will reveal potential opportunities of cooperation in the future. I believe that research in these and other innovative areas, like green finance, will develop further and become traditional topics in central banks’ research agenda. For this reason, I challenge our researchers to consider these trends in their future research agenda. Continuous enhancement of research topics and methodologies is a must for a central bank.
In our day, the promise of precious metal has been replaced by the central bank’s promise of price stability. Underpinning this promise is an institution, that is to say a bureau of statistics, which can measure general price developments, generally by means of a consumer price index. The statistics bureau must be independent of the political authorities, unlike in Argentina recently where the director was replaced because the government did not like the price figures.21 Or unlike the  17  Between 1526 and 1542 the silver content of the circulation coin groat was reduced by 23.2 percent while the coin retained its nominal value of four pence. The King’s gross seigniorage increased from 2.1 to 20.1 percent. Glassman, Debra and Redish, Angela (1988) “Currency depreciation in early modern England and France”, Explorations in Economic History, Vol. 25, Issue 1, pp. 75–97. 18  Normally, it is Parliament’s responsibility to appropriate money and the Crown’s prerogative to spend it. When taxation occurs through inflation, this rule is broken. 19  One of the classic accounts of hyperinflation is provided by Fergusson, Adam, When Money dies. The nightmare of the Weimar Hyper-Inflation, London: William Kimber & Co.  20  Owing to a lack of reliable means of payment, the recovery of production capacity and commerce in Germany after the war came to a standstill. On Sunday, 20 June 1948, under the direction of Ludwig Erhard, a largescale currency reform was carried out in the western zones of occupation.

With monetary union soon to be launched, moreover, the agenda has more room for other matters. The Stability and Growth Pact is one example of earlier initiatives in connection with EMU. Various processes have likewise been started to bring the problem of unemployment into the limelight. 4. There are strong grounds, in the fields I have discussed, for keeping decisionmaking essentially at a national level. The effects of the policies, for instance in the labour market, mostly occur in the country in question. There are also considerable country differences in such matters as the premises for fiscal policy, the structure of government finances, labour market regulations and so on. Still, the ongoing integration of markets, which monetary union may stimulate, is presumably exerting increased pressure for reform. The process that monetary union is now driving onwards is, in fact, fairly typical of EU cooperation in general. The European Union is a highly decentralised organisation. Power and political legitimacy are essentially located at the national level. The joint budget is limited. Matters move forward in a process where external events, for instance in the global economy, and political initiatives modify the agenda. Problems are often managed with arduously negotiated compromises between sovereign states. Each new initiative and decision forms a platform for the next phase. Monetary union, which is now leading to the appearance of new items on the agenda, is after all largely a consequence in its turn of earlier decisions, for instance on the internal market.
The low level of interest rates, both in nominal and real terms, and the generally favourable financing conditions have been lending support to the ongoing economic recovery in the euro area. Fiscal imbalances in the euro area have not improved in 2004, while the current account balance remained virtually unchanged. According to the European Commission, the average general  2  BIS Review 66/2004  government deficit in the euro area increased to an estimated 2.9% of GDP in 2004 (from 2.7% of GDP in 2003), while the current account is expected to record a surplus of close to 1% of GDP, slightly higher than in 2003. Although the Commission is projecting a decline in the total euro area fiscal deficit to 2.5% of GDP in the years 2005 and 2006, the slow pace of fiscal consolidation is a cause of concern, especially in view of the expected growth in the coming year and given the underlying imbalances associated with population ageing. Greater progress towards healthier public finances will strengthen confidence and support, rather than hinder, the ongoing recovery. Economic effects and policy implications of higher oil prices In this presentation of our assessment of the economic outlook and of our decision on the monetary policy stance, one aspect stands out which is of particular interest to investors, consumers and the financial markets at large - the recent sizable rise in oil prices. This is an important issue, and one on which clear and convincing communication from the central bank is warranted.

From this point of view, as you know Banque de France has paid particular attention to the continuation of the BACH database, since we were chosen to run it, two years ago, for the common interest of the ECCBSO members and beyond. We are committed to keeping it functioning properly, and encourage all initiatives to exploit all those interesting series of aggregated ratios. Among the numerous researches that have been made with these data, I would like to refer to the paper published by two economists from the ECB, Andra Buca and Philip Vermeulen, last February, concerning “corporate investment and bankdependant borrowers during the recent financial crisis”. Here also at the Banque de France, we publish several articles in our Bulletin extracting valuable piece of information in the BACH data base. Concerning your so-called WG 3, which focuses on IASB methodology and more generally monitoring of listed groups, Banque de France is interested in the new cooperation started last year with Eurostat. It will help to identify more precisely European groups’ structure and especially cross-border groups. But I understand that this TF is involved in many other topics, of which works on a dedicated data base (ERICA) which can deliver interesting results. There is a lot of work behind this and we can only hope to see those valuable contributions to be well promoted.