samchain/econo-pairs-v1 huggingface dataset:
On the other hand, it is reasonable for public policy regimes to address the externalities – in this case, the potential systemic effects – of thousands of large private transactions that take place away from public markets. My concern is not that sophisticated investors cannot fend for themselves. And I do not want to deny that private transactions can aid stability, as indeed has been the case with much recent private-market debt issuance by banks. But nobody can assess the risks they are incurring in some transactions without much more information about the totality of risks out there and the network of exposures within the financial system. At the least, good aggregate information is needed about patterns of issuance in private markets.12 Product gatekeepers: securities regulators These questions of how securities regulators should respond to the possible effects of innovations on the stability of the system are not limited to their listing-authority function. The rules for collective-investment schemes matter too. A good example, highlighted recently by the G20 Financial Stability Board, is the development of the Exchange-Traded Fund markets to include synthetic structures, leveraged funds, less liquid underlyings, and all three combined.13 Remind you of how securitisations ended up in CDO² and CPDOs? In the EU, ETFs are subject to the UCITs rules for what are in effect mutual funds available to retail investors. Securities regulators need to think about how to avoid mechanically applying a regime for vanilla investment schemes to the structuring and distribution of much more complex and sophisticated products.

The key to progress was the joint recognition by market regulators and supervisors that earlier identification of credit losses is consistent both with financial statement users’ needs for transparency regarding changes in credit trends and with the prudential objective of safety and soundness.19 In the other direction, bank supervisors have typically insisted on the vital confidentiality of the information they receive, while securities regulators emphasise transparency. One could argue that, in many countries, the bank supervisors have done too well in this debate. That was brought home to me some years ago when, in a previous existence at the Bank of England, my then team realised that we could analyse large and complex firms most easily using disclosures made under SEC rules. As announced last week in the joint Bank of England/FSA document on how the future Prudential Regulation Authority will approach banking supervision, we plan in the future to publish prudential returns to the extent possible. Shadow banking and the prudential perimeter My second point about firms concerns shadow banking, defined to mean non-bank firms or structures that replicate the monetary and/or credit services of banks in some way, involving maturity transformation and/or leverage20. 18  See Recommendation 19, FSB Report on Implementing OTC Derivatives Reforms (2010); and the recommendations of the FSB’s Data Gaps and Systemic Linkages Group.
Yet, it picked up more strongly in the last two quarters of 2016, standing at 1.8% in the last quarter of 2016. 7 See Ciccarelli, M. and C. Osbat (2017), “Low inflation in the euro area: Causes and consequences”, ECB  Occasional Paper No 181. 8 See Blanchard, O., E. Cerutti and L. Summers (2015), “Inflation and activity – Two Explorations and their  Monetary Policy Implications”, IMF Working Paper No 230. 9 Staiger, D., J. Stock and M. Watson (1997), “The NAIRU, Unemployment and Monetary Policy”, Journal of  Economic Perspectives, 11(1): 33-49. 10 See the recent Economic Bulletin box entitled “Assessing labour market slack”, Economic Bulletin, Issue 3,  ECB, 2017. The figure is computed by expressing the numbers of unemployed and underemployed, together with estimates of those available for work but not seeking it, and those seeking work but not available for it (the “potential additional labour force”), as a percentage of the extended labour force (i.e., the employed and the unemployed, who comprise the active labour force, plus the potential additional labour force). 11 See Blanchard, O., G. Lorenzoni and J.-P. L'Huillier (2017), “Short-Run Effects of Lower Productivity Growth: A  Twist on the Secular Stagnation Hypothesis”, NBER Working Paper No 23160, February 2017. 12 See Bell, D. and D. Blanchflower (2011), "Young people and the Great Recession", Oxford Review of Economic  Policy, 27, pp. 241–267.

Rerunning our Phillips curve models using this broader measure of slack, or equivalently, a measure of “core” employment only, leads to the prediction errors for inflation becoming measurably smaller. Look at how the gap between actual and predicted inflation largely disappears on slide 5, in particular for the recent history. All this essentially means that it may take longer for inflation to gain steam and wage pressure might only start to rise meaningfully once adjustments in the “intensive margin” take hold – that is, once those who want to work more hours also succeed in doing so and once those who are still willing to work, but not currently counted as unemployed, are reabsorbed. Indeed, hours worked per employee have not recovered since the double-dip recession. So what is the link between these developments and hysteresis? To be sure, the increasing prevalence of part-time and temporary work reflects several factors – including, in part, important structural reforms in many euro area economies that have helped strengthen the resilience of the euro area. 4/9  BIS central bankers' speeches  Yet, the compositional effects we are seeing in the labour market may also reflect more crisisrelated factors, in particular uncertainty about the strength and durability of the recovery and pessimism about the long-term impact of the downturn on growth.
But what is driving the growth of London in particular? One approach to this question is to ask executives in major financial companies, both in the UK and abroad, why they choose to locate business here. A number of these surveys have been conducted recently and they show several common factors. 11 London benefits from English as an international language of commerce, and from its time zone, which means the working day overlaps with Asia in the morning and America in the afternoon. London also has well established financial infrastructure and telecommunication networks. Many of those surveyed point to the regulatory and legal environment. This is partly a matter of the regulatory style – the “risk based and proportionate” approach that the Financial Services Authority has adopted based on general principles where possible. It is partly the simplicity of dealing with a single regulator. 10  Caballero, R. “On the macroeconomics of asset shortages” NBER WP 12753, December 2006. 11  For example, Cook, G. A. S., Pandit, N. R., Beaverstock, J. V., Taylor, P. J. and Pain, K. (forthcoming in 2007). “The role of location in knowledge creation and diffusion: Evidence of centripetal and centrifugal forces in the City of London financial services agglomeration”. Environment and Planning A. 4  BIS Review 29/2007  English law, which is also the basis for financial services law in the United States, prevails here, with the added advantage that practitioners are less likely actually to invoke the legal system.

More international banking activity is booked in London than anywhere else, and the UK is host to the world’s third largest insurance sector as well as its second largest asset management industry. UK markets matter for global commerce. But above all, our markets matter for our prosperity. BIS central bankers’ speeches  1  Markets are a major part of the UK economy. 350,000 people are employed in financial services in London alone, and 1 million across the UK as a whole. Across the country, their enterprise contributes £ billion to our national income and £ billion to our exports. On current trends, the UK-based non-bank financial system would increase from around six times UK GDP to nearly fifteen times by 2050. Most fundamentally, our markets serve our real economy. By financing firms to hire, invest and expand, our markets help drive UK growth. By opening up cross-border trade and investment, our markets create new opportunities for UK businesses and savers. By transferring risks to those most willing and able to bear them, our markets help UK households and businesses insure against the unexpected. Much of this activity depends on fixed income, currency and commodity markets. These FICC markets establish the borrowing costs of households, companies and governments. They set the exchange rates we use when we travel or buy goods from abroad. They determine the costs of our food and raw materials. And they help our companies manage the financial risks they incur when investing, producing and trading.
The second issue concerns the treatment of unrealised losses on debt securities carried at amortised cost - I am referring to the unrealised losses that materialised when SVB had to sell part of its government bonds portfolio: should these unrealised losses be recognised in the current prudential framework, beyond their simple disclosure in the financial statements? More precisely, should these unrealised losses be fully reflected in the banks' equity capital? On this subject, we believe that we must take the time to identify precisely all the advantages and disadvantages of such a solution, which may appear simple but has multiple side effects. On the one hand, the impact of these unrealised losses is already taken into account in the shortterm liquidity ratio, the LCR. On the other hand, systematically accounting for debt securities at their market value would lead to a rise in the volatility of equity capital, with the risk of generating pro-cyclical sales phenomena. In particular, this would have a downward impact on equity capital during periods of rising interest rates - as we are currently experiencing - with the harmful consequences that you can imagine for the financing of the economy and for the public debt market: a fall in the supply of long-term fixed-rate loans and disorderly sales of debt securities. The third issue concerns supervisory practices. Sound regulation implemented at the global level is a good thing. But it cannot be at its best without strict, intrusive and reactive supervision.

I would like to remind you in passing that the term "crypto-currency" is misleading and often used incorrectly, as no crypto-asset currently fulfils the three functions of money, i.e. a medium of exchange, a unit of account and a store of value. This crypto-asset market has grown exponentially since the Covid-19 pandemic. However, in 2022, the succession of spectacular crises including the collapse of the ill-named (algorithmic) stablecoin Terra USD and the collapse of the FTX platform, brought to light the vulnerabilities of this emerging ecosystem and the nascent bridges between crypto-assets and traditional finance. The collapse of FTX led to the bankruptcy of two banks - Signature and Silvergate - while, conversely, the failure of the Silicon Valley Bank threatened the deposits of Circle (the USD Coin issuer) which were placed there. Some of these vulnerabilities are specific to the crypto sector, such as the high volatility associated with the lack of economic fundamentals underlying some cryptoassets; others are shared with the traditional financial system, such as operational risk and in particular cyber risk. All of them may jeopardise the stability of the financial system as a whole. How then should these new players be regulated? 2.2 The existing framework - Europe is leading the way thanks to DORA and MICA The European regulatory authorities reacted swiftly to regulate the new risks that big techs’ inroads into the financial sector carry, with the Digital Operational Resilience Act (DORA) on operational resilience, and the Digital Markets Act (DMA) on fair and non-discriminatory access to platforms.
The asset purchases that are now part of the ordinary monetary policy toolbox involve various kinds of risk being transferred from society at large to the central bank’s balance sheet. 14 This is why the risks have increased on the Riksbank’s balance sheet. But the risk buffer that the Riksbank has in the form of equity and revaluation accounts has not grown at the same rate. This means that we need to take measures to ensure that the Riksbank has enough of a buffer for the risks that exist on the balance sheet. Generally accepted accounting principles indicate that the Riksbank may make provisions for the risk of losses existing on the balance sheet. The Riksbank has  14 A transfer of risk from the public to the central bank’s balance sheet is actually one of the channels through which asset purchases may have an effect on the economy. See CGFS (2019). 10 [13]  previously had a relatively small balance sheet, associated with small financial risks, and has therefore not needed to make provisions to complement the existing loss-absorbing buffer. However, risks have increased in recent years as new assets have been purchased and the balance sheet has grown. As from this year, the Executive Board is therefore starting to make provisions to strengthen our buffer, so that it can be used if the Riksbank should make losses. The provisions will thus form a complement to the existing equity and revaluation accounts.

And all the time, we need to stand ready to develop new tools and make new kinds of analysis – so that we can reach our inflation target. If the world changes, we need to change with it. The ideas in this speech have developed through the course of many conversations over the years. The opinions expressed are my own. I would like to thank Marianne Nessén for her help in writing this speech, and Magnus Andersson, Emma Bylund, Charlotta Edler, Dag Edvardsson, Heidi Elmér, Frida Fallan, Martin Flodén, Jesper Hansson, Per Jansson, Cecilia Kahn, Björn Lagerwall, Stefan Laséen, Cecilia Roos-Isaksson, Marianne Sterner, David Vestin and Anders Vredin for their help and valuable viewpoints, as well as Elizabeth Nilsson, Calum McDonald and Gary Watson for help with translating it into English. ∗  1 [13]  International changes affect monetary policy There is good reason to look back and see what lies behind this development. This has certainly been done before. Both the Riksbank and other central banks have published and discussed a great deal about various international changes that have led to changes in monetary policy. But I believe we need to continue the discussion, partly because this makes it easier to understand current monetary policy, and partly because it forms a necessary basis for a conversation on what the monetary policy of the future might look like. Today, I would like to address some of the most important international changes that have a bearing on monetary policy.
Miguel Fernández Ordóñez: Situation of the Spanish economy and financial sector Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the XV Financial Sector Meeting “The way forward for the Spanish banking business model”, Madrid, 15 April 2008. *  *  *  I shall be focusing today on the Spanish economy which, naturally enough, has been affected by the changes in the international environment prompted by the further slowdown in the US economy, the rising course of oil prices and the prolongation of the bout of financial turbulence. To this end, I shall begin with a brief reference to the situation in the United States and in Europe, focusing thereafter on the macroeconomic outlook for Spain in an attempt to define its degree of exposure to the international financial turbulence. Finally, I shall offer some economic policy considerations. It is in the United States that the deterioration in macroeconomic conditions has been most marked. The effects of the sharp adjustment in the US real estate sector have been amplified by the consequences of the instability in international financial markets, severely affecting business and household confidence. The outlook of most analysts for 2008 points to a strong deceleration in the first two quarters of the year, and even to a recession at some point along the line, although any more medium-term projection is shrouded in considerable uncertainty. In the euro area, some of the risks to continued economic dynamism progressively materialised during 2007.

These were, namely: the appreciation of the euro; higher oil, commodity and food prices;, worsening confidence and tighter financing conditions, prompted by the financial strains; and, of course, the effects of the above-mentioned weakening in the US economy. In Europe, this made for a slowdown in the pace of activity in the second half of the year, although euro area growth remained more robust than in the United States. The resilience shown by the euro area has led analysts to project growth for the coming quarters that will be slacker but not far off potential, albeit with a similar measure of uncertainty to that expressed in the case of the US economy. Turning to prices in the euro area, the rate of inflation stood at 3.5% in March 2008. This worrying figure reflects the strong short-term upward pressures stemming from energy and food price rises in recent months. Foreseeably, although inflation may hold at a rate of over 2% for a number of months more, it should begin to move back to this level in the second half of 2008. That said, considerable upside risks remain, linked essentially to the possibility of second-round effects emerging in wage- and price-setting. The Spanish economy ended the year 2007 with a GDP growth rate (of around 3.5%) that we might qualify as robust. But it began to show signs of undergoing a change in cycle, following an upturn that had lasted for more than ten years. Into 2008, the information available confirms this perception of the domestic macroeconomic situation.
They have also made some progress in improving their international competitiveness, though there remains an opportunity for further structural reforms in labor and product markets – and not just in the periphery – to increase productivity and strengthen long term growth prospects. The European Central Bank’s (ECB) introduction of the outright monetary transactions (OMT) program has reduced financial market tensions considerably in the peripheral countries, so that sovereign debt funding costs in those countries are at more reasonable levels. The risk that interest rates in the periphery could spiral upward has been significantly diminished. Also, the commitment to European integration remains strong, a factor that U.S.based analysts and investors do not always sufficiently appreciate. Over the past few years, when the situation has been the most bleak, the choice in favor of the Union with the euro at its core has always won out. The bad news is that the eurozone is still in a recession and the political support for further rounds of budget-tightening has clearly lessened. The eurozone financial system is being fragmented and the partial easing of pressure on peripheral sovereign debt markets has not translated into a corresponding easing in private-sector borrowing costs in these nations. If growth does not resume relatively soon, then the political support for continued fiscal and structural adjustment could further erode. In Europe, a key challenge is to strengthen the economic foundations of monetary union at the system level.

These regimes have generally been successful: inflation has been low and stable across EMEs since the mid-2000s at a median rate of 2.5%, close to the rate in AEs. In many respects, the exceptions such as Argentina and Turkey prove the norm. Fiscal policy is more of a mixed picture; debt ratios are lower than in advanced economies but fiscal deficits have widened materially in recent years. In general, the resilience of emerging economy banking systems has increased with implementation of most of the FSB post-crisis reforms on track. EMEs are the most active users of macroprudential policy. 13  In the model pull factors are proxied by domestic financial conditions (mean-orthogonalised by global financial conditions), which encompass market views about domestic institutional frameworks. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  However, while there has been progress in developing domestic capital markets – the depth of EME financial markets has doubled since the turn of millennium – this has been insufficient to meet rising financing needs. As a result, the share of FX-denominated debt has increased sharply (Chart 8). And while domestic markets have deepened, the share of foreign ownership in EME local currency bond markets has risen, up from 5% on average pre-crisis to around 25% today.
Until that time, residential construction had been heavily subsidised, mainly via interest subsidy. The interest subsidy meant that the central government guaranteed a low interest rate. During the 1980s, inflation was high, which meant that it was not only cheap to borrow, the loan in principle paid itself off. If the capital investment appraisal were to prove wrong, the local authorities often supplied generous guarantees. The risk entailed in a housing investment was therefore in practice moved from those who built the housing to the taxpayers3. In connection with the crisis at the beginning of the 1990s the interest subsidies were reduced and the public sector ceased providing guarantees for housing investment. This meant that it was no longer so attractive to build housing (Figure 4). Construction has picked up again since 2000, as house prices have risen. However, the response of new construction to price increases has nevertheless been surprisingly slow. One reason for this is that it may only be profitable to build in metropolitan regions and there may be a shortage of space for new building here4 Moreover, it is not unlikely that rent regulations have reduced interest in building new rental properties, which has channelled the household sector’s willingness to pay for housing towards houses and tenant-owned apartments. We thus have a situation where households have had a good increase in income, combined with the fact that it has been inexpensive to borrow, while there has been only a small supply.

The hope is that monetary policy and the Riksbank’s arguments may contribute to reducing the risk of an overly rapid and far-reaching build-up of debt, and thereby also reduce the risk of a more abrupt adjustment of household indebtedness further ahead. It has sometimes been claimed that these considerations have meant that the Riksbank has given less priority to the inflation target and begun to regard house prices and household borrowing as target variables. This is not the case. The purpose of taking into account household indebtedness and house prices is to safeguard the inflation target and a stable development in the real economy, also in the longer term. These considerations could and should, in my opinion, be accommodated within the scope of the flexible inflation-targeting policy the Riksbank conducts, like many other central banks. The Riksbank is far from the only central bank to make this type of consideration. Household indebtedness and house prices have increased at an even faster rate in other countries, as I mentioned earlier. However, I consider that the question of house prices and household indebtedness has been given much more attention in the monetary policy debate than it actually deserves, considering the significance this question has for monetary policy decisions. In the media the interest rate increases have sometimes been linked directly to developments in the housing market. This is an incorrect picture.