samchain/econo-pairs-v1 huggingface dataset:
The two-tier system is designed to strike a balance between two outcomes: it seeks to preserve the incentives for banks to pass through the stimulus generated by the negative interest rate on their reserves, while mitigating the adverse effects that these negative rates might have on banks’ lending behaviour by affecting their profitability. The euro area needs financial intermediaries to remain engaged and active in 3/5  BIS central bankers' speeches  monetary transmission, and the new two-tier system will make sure that the ability of banks to extend loans to their customers at favourable terms remains unimpaired. The different elements of this comprehensive package will be mutually reinforcing in supporting favourable financing conditions for businesses and households, which will sustain investment and consumption. Greater business and household expenditure, in turn, will support inflation dynamics and make sure that they durably converge to our aim. Overall, in view of the outlook and uncertainties we are facing, monetary policy needs to remain highly accommodative for a prolonged period of time. The measures we took at our last meeting underscore our determination and readiness to provide the necessary monetary stimulus in pursuit of our price stability objective. We continue to stand ready to adjust all of our instruments if warranted by the inflation outlook.

The French insurance market has also enjoyed strong growth, with revenue up by almost 3% [2.7% and 3.1% in non-life and life insurance, respectively]. In response to the legitimate concerns that many of you have raised, I have chosen to focus on two main issues: the challenge of low interest rates (I) and our ambition for the Solvency II review (II). *** I. The challenge of low interest rates  A. The economic situation compels us to keep interest rates low I recently marked out the limits that I believe should be set for monetary policy. I thus feel all the more obliged to clarify why the low interest rates are needed, why they are going to continue, and how we have to adapt to them together. I hear your concerns with regard to low interest rates, and I fully understand them. However, it is important not to lose sight of the long-term perspective: low interest rates are not only driven by monetary policy – they are primarily the consequence of long-term structural trends, notably resulting from the  Page 2 of 6  change in the balance between a high level of savings and a fall in investment linked to an ageing population and the slowdown in productivity. The low interest rates thus reflect the historic low level of what economists refer to as the real natural rate of interest, R*, which has declined by around 2 percentage points over the last 15 years in both the euro area and the United States.
20132, 2010 and Maddaloni, A. and J.-L. Peydró, “Bank Risk-Taking, Securitization, Supervision and Low Interest Rates: Evidence from the Euro Area and the U.S. Lending Standards”, ECB Working Paper Series No 1248, 2010. 6  One paper that does not focus on banks is Bekaert, G., M. Hoerova and M. Lo Duca, “Risk, Uncertainty and Monetary Policy”, NBER Working Paper Series No 16397, 2010, which finds that low policy rates lower the risk aversion on the stock market after around five months. BIS Review 164/2010  3  to bear this mechanism in mind. If the policy rate has been low for a long period of time, there may be reason for particular vigilance regarding signs of increased risk propensity. When there are such signs, it may be easier to act. Although not always easy to detect, it is not impossible to identify signs of increasing risk. For example, the Riksbank warned in speeches and reports, a long time before the crisis broke out, that the compensation for risk on the financial markets was too low. 7 Weaker monetary policy effect when agents are consolidating their balance sheets? Something that has characterised the recovery from the recent crisis in many countries, although not in Sweden, is that it has been very slow. One hypothesis is that several economies are currently undergoing what is known as a “balance sheet recession”. This concept was introduced a few years ago as an explanation for developments in Japan and its “lost decade”.

12 Having said this, it may be worth adding that monetary policy and a policy for financial stability usually go hand in hand, more or less automatically. Moreover, problems with financial stability only arise under certain limited periods. On the other hand, one may claim that the crisis and its effects show that we actually should worry about it slightly more often than we have done. If we are successful in formulating and using regulations and supervision, the central bank can receive assistance with both of the monetary policy problems I mentioned earlier. The central bank can hold the policy rate low when the economic outlook calls for this, without being afraid of risks building up through a monetary policy risk-taking channel. And if regulation and supervision can be used to prevent credit-driven bubbles arising, the central bank need not fear a balance sheet recession where monetary policy has little effect. Regulation with monetary policy motives With regard to coordinating the interest rate lever and the regulation level, I would like to return to a question I raised when I talked about balance sheet recessions. As I noted then, a fall on the property market could lead to a weak performance in the economy if households become uncertain about the future and feel they must consolidate their balance sheets. I also noted that this does not mean that the banks will experience problems that could threaten financial stability.
The way forward Going forward, therefore, it must be realized that in a monetary union the effects of institutional rigidities, inappropriate policies and inefficient practices on prices, costs and competitiveness will inevitably become visible in the shape of lower income levels relative to the other members of the union. Given that a sizeable income gap already exists with the euro area, removing the remaining impediments to faster growth is, therefore, a policy imperative. Two elements of an appropriate response to this challenge emerge spontaneously from an analysis of the current macroeconomic situation. Attention has already been drawn to the over reliance on consumption as a driver of growth since 2005, highlighting the need to devote more resources to investment. In Malta’s case, this must continue to take the shape predominantly of FDI because of the implied technology transfer and access to markets. Attracting further FDI, however, will require a determined effort because when the current recession is over the global marketplace will be characterised by fewer, but more costefficient suppliers and a slow-growing demand; a large pool of unemployed labour, implying downward pressures on wages; and an increased tendency for investment to shy away from relatively expensive locations. A review of Malta’s investment promotion strategy should, therefore, be undertaken that takes this scenario fully into account. Private investment must be supported by appropriate levels of public investment, mainly of an infrastructure nature.

“The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled … lest we become bankrupt. People must again learn to work, instead of living on public assistance.”  BIS Review 60/2009  7
As set forth by the Regulation, this exercise should include elements of an asset quality review as a basis for a thorough solvency analysis. This analysis should also be instrumental in identifying potential legacy problems. It is important that the financial clean-up of these legacy problems will be undertaken by the responsible Member States and not by the ESM and certainly not by the ECB. Just like an insurance policy, the SSM can cover future risks. Past omissions must be resolved by those who are accountable for them. This does not rule out interim solutions involving actions by the SRM and (privately financed) resolution fund as well as by the ESM. Fourth, appropriate safeguards to mitigate reputational risks – for both the supervisor and the monetary policy maker – are needed. It is therefore critical to implement an actual internal separation between supervisory and monetary functions, that should also be coupled with an external dimension, reinforcing the outside perception of such clear operational and accountability separation. The Chair of the Supervisory Board is responsible for discharging the accountability duties towards the European authorities (European Parliament, finance ministers of participating Member States, the European Commission). They may also, on occasion, be asked to report to national parliaments. More regularly, the representatives of the national competent authorities will perform such a role at the domestic level.

And it failed to recognise that central banks have a vital role to play in maintaining financial stability because of the deep underlying connection between it and monetary stability. Both are fundamentally about maintaining the public trust and confidence in money and financial intermediation that are essential for them to oil the wheels of commerce. That trust and confidence can be undermined through a loss of certainty about the future value of money, a loss of confidence in financial intermediaries, or ultimately a loss of faith in the financial system. Central banks have a primordial responsibility to act as guarantors of trust and confidence in money because of their status as monopoly issuers of currency. This naturally gives them control over the quantity of money and interest rates – monetary policy. It also means that a core part of financial stability policy – acting as lender of last resort to private financial institutions at times of financial stress – falls naturally to central banks. Other instruments of financial stability policy seek to prevent the build-up of vulnerabilities in the first place. Microprudential supervision aims to maintain the safety and soundness of individual financial institutions by ensuring they are adequately capitalised and have sufficiently resilient funding and liquidity. Macroprudential policy seeks to safeguard the stability and resilience of the financial system as a whole both by using prudential policy for macroeconomic ends – for example in managing the financial cycle – and by addressing risks related to structural features of financial institutions and markets.
If the economy is close to its underlying potential, a fiscal stimulus will end up mostly in inflation rather than growth. This brings us to the next broad theme of 2017: the return of inflation and the tightening of financial conditions globally. The normalisation of US monetary policy Global inflation, which was weighed down by the fall oil prices during the past two years, has started to gradually pick up again. Energy prices have rebounded off their lows and commodity prices appear to have bottomed out. On a global basis, producer prices have started to rise since early 2016, in tandem with the recovery of commodity and industrial input prices. 3/7  BIS central bankers' speeches  Even in China, producer prices have turned positive, following 4 years of deflation. Globally, we could see a stronger pass-through from producer prices to inflation in 2017. In the US, to the extent that fiscal stimulus boosts demand and lifts inflation towards the Fed’s target, it could precipitate a faster pace of interest rate normalisation than currently priced in. The normalisation of monetary policy is a good thing and is to be welcomed. It would be in line with stronger economic growth and waning deflation risks. Faster growth in the US will be good for emerging Asia. A gradual rise in interest rates away from the zero lower bound will also be good for financial stability, helping to stem the build-up in debt and cool inflated asset prices.

But even these could spread more widely through global supply chains and dampen any uptick in demand-driven trade flows. They could even backfire on the US given how integrated production networks are across countries. In short, the growth spill-over from the US to the rest of the world will depend on the balance between fiscal stimulus on the one hand, and financial tightening and trade restrictions on the other. The current consensus is that the former will outweigh the latter. We will have to see. Conclusion On balance, chances are that global growth will be slightly higher this year compared to the last. Hope and confidence are important factors and recent improvements in business and consumer sentiments may well translate into higher investment and consumption. A shift in the macro policy mix in the US, away from excessive reliance on monetary policy towards a bigger role for fiscal support, is to be welcomed. A well-designed fiscal policy can provide some modest stimulus in the short-term but more importantly help to augment the productive capacity of the economy in the long term. A successful outcome could encourage other advanced economies to seek a better balance between monetary and fiscal policies. 6/7  BIS central bankers' speeches  Some caution though is warranted. There remains considerable uncertainty as to the actual policy changes in store. They may not pan out as expected. There are serious downside risks on immigration and trade policies.
Thanks to significant lending volumes and strong price formation on domestic loans, the mortgage institutions have also been able to compete successfully on the international bond market. Borrowing against the entire balance sheet as security requires significant risk capital or some form of guarantees from the owners. All mortgage institutions, with the exception of SEB Bolån which does not does undertake borrowing transactions in foreign currency, have a capital cover considerably above the statutory minimum of 8% (Figure 9). Swedish mortgage institutions´capital ratios, 1999. NB-Hypotek SBAB SEB Bolån Spintab Stadshypotek  Total 10 9,4 8,8 13,5 12,6  Tier 1 8,8 6,5 4,8 10,0 12,6  Source: Mortgage institutions´ annual reports. The Swedish mortgage institutions are currently estimated to borrow around 20% of their capital from abroad. The major part of this is borrowed from investors in the USA and Japan. Borrowing in the euro area accounts for approximately 20% of borrowing abroad. It is difficult to see that the option of borrowing in euro would increase central European investors’ interest in Swedish housing bonds. As long as Sweden is not a member of EMU and as long as Swedish borrowers want to borrow in Swedish kronor, the foreign exchange risk will remain. Increasing competition on the mortgage market will entail a greater need for new forms of financing that are more economical with the institution’s risk capital. Two financing forms being used increasingly by foreign mortgage institutions are gilt-edged bonds and securitisation.

Borio, C and Disyatat, P (2011), “Global imbalances and the financial crisis: link or no link?”, BIS Working Papers No. 346. Eichengreen, B J and Mitchener, K J (2003), “The Great Depression as a credit boom gone wrong”, BIS Working Papers No. 137. IMF (2012), “The Liberalization and Management of Capital Flows: An Institutional View”, Staff Paper. Kuttner, K and Shim, I (2013), “Can Non-Interest Rate Policies Stabilise Housing Markets? Evidence from a Panel of 57 Economies”, BIS Working Papers No. 433. Lane, P R (2014), “International Capital Flows and Domestic Credit Conditions”, Macroeconomic Review Vol. XIII(1), Monetary Authority of Singapore, Economic Policy Group. BIS central bankers’ speeches  7  Mishkin, F S (2008), “How Should We Respond to Asset Bubbles?”, speech at the Wharton Financial Institutions Center and Oliver Wyman Institute’s Annual Financial Risk Roundtable, Philadelphia, Pennsylvania, 15 May 2008. Obstfeld, M (2014), “Trilemmas and Tradeoffs: Living with Globalization”, paper commissioned for the Asian Monetary Policy Forum (draft). Rey, H (2013), “Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence”, Proceedings – Economic Policy Symposium – Jackson Hole, Federal Reserve Bank of Kansas City. Schularick, M and Taylor, A M (2009), “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870–2008”, NBER Working Paper No. 15512. Stein, J C (2014), Comments on “Market Tantrums and Monetary Policy”, speech at the 2014 U.S. Monetary Policy Forum, New York, 28 Feb 2014.
In particular, mashing together diverse data sets offers the possibility of new types of insights. New software algorithms crunch the enlarged Big Data sets to make more reliable predictions on repayment and hence improve performance of loan portfolios. •  For example, a lender to small businesses requires access to the company’s bank and credit card accounts, to constantly monitor the company’s cash flow and hence ability to repay the loan. Application programming interfaces Despite the greater availability of data and the possibilities for harnessing this data opened by technology, financial institutions continue to face challenges on the data front. •  More data means more cost. •  While technology has significantly reduced the unit costs of data gathering, it has ironically also raised the potential total cost of data by opening more possibilities for data mining and analysis. One way to improve access to data without raising costs significantly would be for the industry to pool relevant data together. •  The benefits of aggregating data across the industry can be seen from our experience with the credit bureau, which has allowed banks to make better credit underwriting decisions. •  However, concerns over confidentiality and market sensitivity have held back data sharing among financial institutions and restricted public access to data. One effective way to achieve seamless data sharing is through the publication of open Application Programming Interfaces, or APIs, by financial institutions for data submission.

Ravi Menon: Basics for smart finance – common standards and seamless data Closing remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the SIBOS Conference, Singapore, 15 October 2015. *  *  *  Mr Yawar Shah, Chairman, SWIFT Mr Gottfried Leibbrandt, CEO, SWIFT Ladies and gentlemen, good afternoon. A. Revolution in communications  “What hath God wrought?” read the first telegraphic message sent by Samuel Morse on 24th May, 1844. The telegraph marked a revolution in communications at the time. •  Transatlantic telegraph cables cut communications between America and Europe from about 10 days – the time it took for steam ships to sail across the Atlantic – to a matter of minutes. •  In fact, the mid-19th century leaps in transport and communications technologies ushered in the first phase of economic and financial globalisation. Ground-breaking as the telegraph was, a text message that takes minutes to arrive will be considered glacial by today’s standards. It will certainly not be able to support the frenetic pace of communications in the global financial system. Thankfully, we have SWIFT. Last year, there were 5.6 billion messages carried globally on SWIFT’s network. •  Close to half the messages related to international payments, which lies at the heart of global banking. •  Technology has transformed cross-border finance. Smart Financial Centre It is MAS’s conviction that innovation and technology will be critical to the future growth and success of Singapore’s financial sector.
In Asia, this will pose a strong challenge to Singapore, because it will strengthen the tendency for a single major hub to emerge, rather than several smaller ones. Tokyo will perforce be the biggest financial centre in our time zone, because of the sheer size of Japan’s investment funds and its economy. But Tokyo has significant limitations - a high cost structure, domestically oriented financial markets, consensus-based decision making, and not least, a lack of English speakers. This creates room for at least one other major financial hub in Asia. Singapore enjoys good economic cooperation with our Asian partners. We are well-placed to service the region, whether it is PSA, Changi Airport, or financial services. As the region recovers and grows, we hope to prosper together with Malaysia, Indonesia and Thailand. But our relationship with them is qualitatively different from Hong Kong’s vis-à-vis China. Besides, Southeast Asia is a smaller hinterland than China. Therefore for Singapore to grow as a hub, we must extend our catchment area beyond Southeast Asia. Our orientation must be international, and not just regional. We have done this before. This is how we became the fourth largest forex centre globally and the leading centre for global derivatives trading in the Asian time zone. The challenge is to repeat this feat in new areas of competence. Developed markets and global players are already our customers. Singapore can be a portal, an intermediary or a market for them. Finding the right partners in strategic alliances will be critical.

The growth of exports in 2010 was fuelled by the recovery of global economy and the favourable conjuncture of prices in the global markets, the depreciation of the exchange rate, the Albanian entrepreneurship efforts to expand the market and by some other factors of transitory nature. Therefore, promoting exports in a stable and long-term fashion requires undertaking structural reforms, which will in turn enhance the competitiveness of the Albanian economy. This would ultimately serve to the transition to a more stable economic growth model and, at the same time, to curbing the reliance on foreign financial sources. Our analysis of monetary indicators concludes that the growth of money in economy is concurrent with the economic agents’ demand for monetary assets, hence creating no room for inflationary pressures in the future. BIS Review 170/2010  3  Aggregate M3’s average growth was 11.2% in July and August, being in line with the nominal economic growth and the enhanced confidence in the banking system. Its growth during this period was mainly determined by the increase of the banking system’s net foreign assets. Private sector credit grew by 9.8% y-o-y, close to the previous quarter’s rate. Although the better liquidity figures and the improved banks’ balance sheets led to higher banking supply and provided greater room for lending, the latter has progressed at moderate rates. Our analyses on lending in economy show that demand remains contracted and the number of worthy projects to lend is still low. The foregoing remains a constant concern for the Bank of Albania.