samchain/econo-pairs-v1 huggingface dataset:
It can be said that Iceland is a step ahead of many other countries in this regard, as the events of the past year show that there is ever-increasing interest in setting even clearer liquidity requirements for banks. The operational climate for banks is difficult all over the world. Under current conditions, Iceland’s banks – and many others – have no other option but to furl their sails, and they have already begun to do so. They must implement stringent cost control and direct their attentions toward their core operations and the areas where they can truly compete. They might also have to sell off some assets. It is important that the banks continue to disclose information on their position, and where transparency is lacking, they must enhance it. The conditions that have developed in the global financial markets were foreseen by very few, and they are virtually unprecedented. However, I would like to mention that the Central Bank of Iceland stated the following in its Financial Stability 2007 publication last April: “The Central Bank underlines that global market conditions can take a sudden turn for the worse and it is important to be on the alert and prepared for such a contingency. The current episode of ample liquidity and lower interest rates which has been ideal for risk-seeking investors may change unexpectedly.” Even though conditions will eventually improve, they are unlikely to improve much in the near future.

In other words, financial companies have pulled equity indices downward – much more so in Iceland, where banks constitute a greater proportion of the index than in other markets. Iceland’s commercial banks went through a difficult period in early 2006 and learned a number of things from the experience. Among the lessons they learned was that they must increase transparency in their operations to a significant degree, reduce cross-ownership, significantly enhance their liquidity position, and increase the proportion of deposits in their funding. Having undergone these changes, they were much better prepared to weather last year’s turmoil than they would otherwise have been. Iceland’s banks have been considered bold in their investments, and they have a reputation for being more risk-tolerant than banks in many of our neighbouring countries. This may be correct, but it is also reflected by the fact that Icelandic banks have elected to maintain a relatively strong equity position. The banks are all subject to surveillance by the Icelandic Financial Supervisory Authority, which bases its operations on the regulatory framework that applies to financial markets in the European Union. Subsidiaries of Icelandic banks are all subject to surveillance by the financial supervisory authorities in their home countries. The Icelandic Financial Supervisory  1  E.g. Credit Sights, February 3, 2008: Icelandic Banks FY07: Heads You Lose, Tails You Lose. BIS Review 25/2008  3  Authority carries out regular stress tests on the banks’ accounts and publishes the results on its website. These stress tests assume extreme changes in fundamental premises.
The crisis opportunity costs for UK and euro-area citizens have been the highest for at least a century.2  Much the same picture emerges if we look at measures of the fiscal cost of crisis. Again, there are a number of methods for gauging this cost. But one simple metric is to look at the pattern of government debt-to-GDP ratios after the Great Depression and Great Recession, recognising that the larger part of the debt sustainability cost of crisis typically arises from the denominator shrinking than from the numerator rising. Chart 2 plots these debt-to-GDP ratios, again for the US, UK, France and Germany. It suggests that, in the decade after the Great Depression, levels of government debt relative to GDP had increased by around 28 percentage points in the US, 9 percentage points in Germany, but actually declined in the UK. Since the Great Recession, levels of debt relative to GDP have increased by, on average, 1  For example, Hoggarth, Reis and Saporta (2001). 2  Figures in this paragraph calculate a continuation of pre-crisis GDP using the average growth rate of output in the 10 years preceding the crisis. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  28 percentage points for the same set of countries. The fiscal cost of the Great Recession, at least on this metric, is larger than during the Great Depression.

Misconduct costs by banks globally have exceeded USD320 billion since 2008, with USD42 billion incurred in 2016 alone. At the institutional level, there should be a ‘clear tone from the top’ that unethical behaviour will not be tolerated. This culture of ‘zero tolerance’ for unethical behaviour should permeate across all levels of the organisation, including in the process of recruitment, retention and remuneration. As a community, we cannot possibly expect ethical behaviour to be burnished if we persist in retaining, hiring or rewarding people who had acted otherwise. Our work environment should also evolve, making it conducive and safe for individuals to speak up on ethically questionable practices. Encouraging conversation about ethical behaviour in the workplace can go a long way in empowering all layers in the organisation to serve as an ethical beacon. This can significantly reduce the probability and occurrence of unethical conduct. The third is Calling. We should marvel at the deep sense of purpose and identity contained in the medical profession. One sentence in the modern version of the Hippocratic Oath is particularly resonating: “I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon’s knife or the chemist’s drug.” Ultimately, to make sense of what we do in our profession, we cannot shy away from its purpose.
This topic is studied not by a few banks or countries — this is a global trend. Approximately 50 regulators worldwide are dealing with this topic. Some countries have already launched their pilot projects. We believe that we will be inevitably moving in this direction. Over the period of the discussion of our consultation paper, we have received very detailed feedback from the banking community, and not only in writing — we are discussing various aspects of this topic at multiple sites, including the Association, the State Duma, and the Federation Council. We will continue to study this topic further since it definitely requires diving into the particulars and extensive detailed discussions. Our preliminary findings 6/7  BIS central bankers' speeches  as are follows: the majority of banks support a two-tiered retail digital ruble model where banks service clients opening wallets on the central bank’s platform and processing transactions. We will sum up the complete results of the public consultations in the near future. Then, we will elaborate a detailed concept of a digital ruble and will be discussing it with general public, market participants, and banks at the beginning of summer. The next stage is the creation of a prototype platform, testing, limited-scale experiments, and, of course, changes to be introduced into laws. The second priority, which, just as digital currencies, has become a global trend as well, is ESG. The world is paying increasingly more attention to climate and generally environmental risks.

If the banking community itself turns out to be unable to resist the temptation of descending into practices that are abusive for consumers, we will be responding adequately. As I have already said, the first issue of our concern is misselling and hard selling. We believed the banking community to be interested in retaining people in the financial market and keeping their funds inside the financial system. We were hoping that banks would be able to agree upon selling rules and would not offer such a product to a client that would be disappointing, striving to sign one contract, would not be misleading about product prices or conceal additional services. The associations of financial market participants jointly developed selling standards two years ago already. Eventually, as little as 20 banks have joined these standards, and even these banks fail to comply with them. As you remember, we have held several discussions on this topic, emphasising that if the banking community does not comply with the standards itself, we will have to request legislative authorities to adopt adequate regulation. Disappointingly, that negative episode we have also discussed when investment life insurance policies were being sold through banks was followed by the sales of complex structured products. This implies that even such a dramatic episode as investment life insurance has had no influence on abusive practices in banks’ sales under agency agreements. Therefore, we were forced to request legislative authorities to grant us the powers to stipulate selling rules through our regulation.
There are a wealth of initiatives at present: the G20, the United Nations, the Financial Stability Board and the OECD are all involved. And notable within the EU, undoubtedly, is the European Commission’s action plan on sustainable finance. In the case of Spain, we should mention the Draft Climate Change Law. In the central banking and banking supervisory milieu, I would mention the work of the Network for Greening the Financial Sector (NGFS). We participate actively in this network, which has just published its second report. This includes best practices for boosting the role of the financial sector in complying with the Paris Agreement. Banks themselves are increasingly joining ethical or responsible banking initiatives, observing international principles that not only look at environmental sustainability aspects, but also at the social impact of investments. The development of so-called “sustainable bonds” is also being encouraged. These are much in demand by investors, for which a growing market is being created. We should be mindful that compliance with the Paris Agreement goals necessarily entails very substantial changes in our productive model. Clearly, too, to be successful, any transition of this type must include far-reaching measures and instruments that affect practically all economic agents, not only credit institutions. 12/13  However, banks can and should play a key role in this transition. At the start of my address I talked about the fundamental role of banks as a necessary filter for distinguishing between viable economic projects.

It goes without saying that these changes in the structure of financial markets, in combination with the emergence of new technological advances, pose a challenge for banks. Particularly so against the current background of low profitability of the banking systems in Europe. The arrival of new technologies has reduced the barriers to entry in certain traditional banking activities, creating the possibility for new competitors to banks, such as the FinTech companies, to access bank customers in a highly dynamic manner for a relatively modest investment outlay9. But the new technologies do not only pose threats for banks, they also offer opportunities for them in terms of potential efficiency gains. One example is the application of artificial intelligence and the systematic use of large databases with real-time information and a high degree of disaggregation (commonly known as big data) for both their commercial business and for regulatory compliance. Apart from the potential efficiency gains for banks and for the financial system as a whole, the application of some of the new technologies in the financial sector could bring other 7  Arce, O., Gimeno, R., and Mayordomo, S. (2017) “Making room for the needy: The effects of the Eurosystem’s Corporate Sector Purchase Programme”, Banco de España Working Paper No. 1743.
Trichet: I can confirm that three of the four decisions were unanimous or taken on the basis of a consensus. One decision namely the Securities Market Programme was decided, as I have already said, by an overwhelming majority. All our decisions – including last Sunday’s – are taken after weighing up all the pros and cons. HB: Were you not in contact with authorities? Trichet: Yes, I was in contact with my good friend Ben Bernanke, the Chairman of the Federal Reserve and other central bank governors, throughout the evening and the night. It was not only a European but also a global serious situation. HB: For more than ten years, the ECB was able to keep inflation in the euro area under control. Now, all of a sudden, the Union has stopped functioning properly. What has happened? 2  BIS Review 67/2010  Trichet: We are currently facing challenges on a global scale. The events that we are now seeing have ceased to be a matter solely for Europe. The challenge of running sound sustainable fiscal policies is the problem affecting most of the world’s major industrialised countries. That needs to be understood. The crisis in private financial markets has now been followed by severe tensions in the public sector. Ultimately, all industrialised countries are very much in the same boat. HB: From Athens are coming only nice words, just words… Trichet: No, nice words aren’t the only thing coming out of Athens.

Yiu-kwan Choi: Launch of the CMU Bond Price Bulletin Remarks by Mr Yiu-kwan Choi, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Signing Ceremony for the Launch of CMU Bond Price Bulletin, Hong Kong, 9 January 2006. *  *  *  It gives me great pleasure to welcome you all to this signing ceremony for the launch of the CMU Bond Price Bulletin. We are pleased to see the launch of the Bulletin. This, we believe, will be a useful tool to help promote the retail bond market in Hong Kong. As you know, financial infrastructure development has always been a priority item on the HKMA's policy agenda. A robust financial infrastructure is important in maintaining the stability and integrity of the monetary and financial systems and in strengthening Hong Kong's status as an international financial centre. Over the years, we are proud that, with the support of banks and other financial institutions, the HKMA has built a sophisticated financial infrastructure that meets the best international standards. Having said that, we are conscious that there is always scope to further strengthen our financial infrastructure to take account of the latest technology and market developments. It was precisely for this reason that the HKMA conducted a comprehensive review last year on financial infrastructure development in Hong Kong. The launch of the Bulletin is one of the recommendations arising from this review. The objective is to provide retail investors with convenient on-line access to information on bond products and bond prices.
The interest rate reductions may also result in a sharper rise in house prices, leading to stronger growth in household wealth. Historically, a larger share of household income has, in this situation, been used for consumption. Lower real interest rates make it less profitable for households to invest in financial instruments and they will be more inclined to make purchases - for example of durable consumer goods - now, rather than wait until later. On the other hand, many households probably expect that the interest rate will not remain as low as it is now and will avoid allowing higher consumption to become entrenched. The fall in interest rates may provide an opportunity for households with large loans to make extra debt repayments. We nonetheless expect a fall in the saving ratio. Lower interest rates may also increase the need for allocations to pension funds. Companies account for a substantial share of the allocations to pension funds, and their ability to pay will be reduced as a result. 4  BIS Review 50/2003  In light of these prospects, a large majority of households have a positive view of their own future financial position. According to TNS Gallup’s confidence survey for Q3 2003, confidence in the country’s economy has also improved considerably from a low level earlier this year. Companies are facing a different situation, however. While household income has risen sharply, earnings in the enterprise sector have been low with an associated low level of investment activity.

However, there was some cross-regional variation and the indicators of the overvaluation of house prices showed values close to equilibrium.6 It should also be borne in mind that the weight in mortgage lending of highly leveraged transactions has been much lower in the post-2008 period, and that the mortgage loans which survived the global financial crisis have credit conditions that can generally be considered prudent, and are closer to reaching maturity. All these developments better position this sector to withstand the current crisis. In any event, this sector is inevitably also reflecting the impact of the health crisis. Even before this shock, the housing market had entered a phase of gradual slowdown, both in terms of activity and transactions and of prices, after the marked expansion of prior years, once the adverse effects of the financial crisis had been overcome. This outlook was profoundly affected by the declaration of the state of alert due to COVID-19, with a 6  See https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/NotasInformativas/20/presbe2020_49en.pdf. 8  particularly sharp slump in transactions in the second half of March and in April. In subsequent months, a gradual, albeit partial, recovery is estimated to have taken place, once the restrictions on movement had been lifted and as the house purchase process gradually began to operate as normal. In effect, the lockdown made it much more difficult to conduct the process of buying or selling a home.
In the period from July to September 2000, the three-month average of M3 growth stood at 5.4%, above the reference value of 4½%. However, some indicators suggest that over recent months a moderation in monetary growth has been occurring. Let me now turn, within the second pillar, to the prospects for economic growth in the euro area, as these represent a key factor affecting the outlook for price stability in the medium term. The latest estimate by Eurostat for the second quarter of 2000 indicated a real increase in GDP of 0.8%. The pace of new job creation has remained high and the unemployment rate currently stands at 9.0%, a level not seen since mid-1992. Some monthly indicators suggest that some moderation in real GDP growth might have occurred in the second half of this year, mainly as a result of the negative impact of the recent increases in oil prices on domestic income. However, by contrast with previous periods of strong oil price rises, the euro area economy is now less dependent on oil. This should help to prevent any sustained negative effect on confidence. There are therefore good reasons to remain confident with regard to growth prospects. On the external side, euro area export growth should benefit further from the expansion of the global economy. Considering these factors together, the growth dynamic in the euro area can be expected to be maintained in the coming years.

Moreover, market participants continuously review and update their own assessment of future economic and monetary policy developments. Financial market prices therefore reflect a realtime and continuous update of market expectations about future economic and monetary policy developments. 3. How do financial markets affect monetary policy? As I mentioned at the outset, the link between monetary policy and financial markets is not a one way street. Financial market prices reflect market expectations about future economic developments, such as inflation, output, and the likely course of monetary policy. It is therefore natural and appropriate for central banks to evaluate closely the information contained in market prices. In other words, market expectations can and should influence the setting of monetary policy. However, central banks must exercise caution in using the information extracted from market expectations as an input to formulating monetary policy. My previous comments illustrate that the more credible and the more transparent a central bank is, the more market prices will reflect the central bank’s own expectations about the future. In other words, the information value of financial market prices for monetary policy purposes decreases to the extent that they no longer reflect an independent evaluation by millions of market participants about probable future developments in the economy and in financial markets. An example may illustrate the potential pitfalls of a central bank relying excessively on market expectations in formulating policy. Consider a country with a liquid inflation-indexed bond market. In principle, these bonds reflect what the market expects inflation to be in, say, ten years time.
Mr George identifies two distinct issues relating to monetary policy in the United Kingdom  Speech by The Rt Hon Eddie George, Governor of the Bank of England, to the CBI Annual Luncheon at the Guildhall in London on 25 February 2000. *  *  *  Thank you Chairman, Ladies and Gentlemen, I would normally open my remarks on occasions such as this by saying what a pleasure it is to be here. But central bankers need to time their appearances before CBI audiences with very great care. And I’ve clearly failed on this occasion. The exchange rate is strong - many would say excessively strong and the latest movements in interest rates have been upwards. Typically that is likely to mean that I’ve entered a lion’s den! Well I hope you’ve all enjoyed your lunch as much as I have - because I once dreamt that Daniel, who must have been one of my ancient forebears, and who knew a bit about entering a lion’s den, gave me some very good advice. He said to me in my dream, “If you really must do it then make sure that the lions have been well fed first - they might just drop off to sleep!” Looking around, I see there is something in what he said! Daniel also said, “Whatever you do, don’t provoke them!” Well at the risk of ignoring this advice I should like to establish just what sort of lions you all are!

Our experience, as well as that of other countries, shows that a temporary slowdown is often an unavoidable consequence of strict economic management, aimed at controlling over-expansion and holding inflation in check. This is one reason why it is so important to prevent such waves from becoming too high. It is, however, an oversimplification to claim that monetary policy alone makes the decisive difference. Interest rates primarily affect demand in the economy. There are, on the other hand, many other factors which affect both demand and supply in the economy. These include, for instance, fishing quotas, public finances and public investment, foreign investment, e.g. in heavy industry, and the wage policy of the social partners. People who make these decisions control important economic instruments which are beyond the reach of the Central Bank. There are thus many parties involved in managing economic affairs and the Central Bank is far from the only party responsible here. Actions to boost economic growth and reduce unemployment Recently a number of actions have been announced to relax restraint in the economy. The full effect of major interest rate cuts in recent months has yet to be felt. The Central Bank has also announced imminent relaxation of reserve requirements, which will release funds in the banking system and should lead to interest rate decreases there. Each day the Central Bank has puchased foreign currency, in so doing placing some ISK 11 billion in circulation since September, which has certainly slowed the exchange rate rise.