samchain/econo-pairs-v1 huggingface dataset:
As I said earlier, I believe that we must take the risks associated with financial imbalances into account in our monetary policy decisions as the level of household indebtedness is so high. Why not lower the repo rate more when unemployment is high? One of the arguments put forward for further repo-rate cuts is that unemployment is high (see Figure 14). I have a lot of understanding for this argument. So why not cut the repo rate more? Here I would like to point out once again that we have lowered the repo rate and the repo-rate path several times over the last 12 months, partly with particular reference to unemployment. However, our analysis shows that the relatively high rate of unemployment also reflects structural problems. For example, there are signs that the matching of job-seekers with job vacancies has deteriorated in recent years, which makes it difficult to reduce unemployment. Figure 15 clearly shows that while the number of unemployed in non-vulnerable groups has fallen in recent years, the number of unemployed in the more vulnerable groups has instead increased. 6 This illustrates the matching problems on the Swedish labour market. But even while focusing on unemployment, monetary policy must take a long-term view and strive to avoid problems further ahead. A low repo rate may provide short-term gains, but “if we go too far down that road” problems will be waiting for us, including problems regarding unemployment.

Public finances were hit hard when the banking sector had to be rescued in the wake of a bursting housing bubble, in which housing prices and bank lending had chased each other’s tails to form an unsustainable spiral. This was why these countries quickly encountered major problems in managing the growth of their sovereign debts, despite their relatively good position at the outset. An excessive build-up of debt – irrespective of whether it takes place in the private or the public sector – leads to problems sooner or later. Events in the euro area in recent years provide a frightening illustration of this. It is clear that the euro area is facing major challenges, not only for individual countries but for the EMU as a whole. The ECB, the EU and the IMF have implemented a range of support measures to come to terms with the acute problems. A number of new decisions and measures have also been announced within the EMU over the course of the year. However, it is important to point out that responsibility for managing these problems primarily lies with the politicians in the respective countries. Decisions are required at the national level, not only to resolve the problem of weak public finances but also to improve competitiveness (see Figure 6).
So the problem of global imbalances is hardly new. It was behind many of the currency crises in the post-war period and exercised the participants at the Bretton Woods conference in 1944. And for the past decade it was a regular item on the agenda of international meetings of finance officials at the IMF, G7 and elsewhere. But the incompatibility of different countries’ policy frameworks has proved difficult to resolve. At the Bretton Woods Conference, the British economist John Maynard Keynes identified the asymmetry of the obligations placed on surplus and deficit countries as the main source of the problem. He had argued that, “the process of adjustment is compulsory for the debtor and voluntary for the creditor. If the creditor does not choose to make, or allow, his share of the adjustment, he suffers no inconvenience. For whilst a country’s reserve cannot fall below zero, there is no ceiling which sets an upper limit.” Both the British and the Americans put forward proposals for a system with more symmetric obligations – but without success. For most of the post-war period, the obligations on debtor countries, asymmetric though they may have been, prevented the imbalances from becoming too big. More recently, the fact that the largest deficit country, the United States, was the issuer of the world’s reserve currency allowed the imbalances to continue for a long period, inducing a sense of complacency and threatening the stability of the global economy.

There is a summary of the results of the survey for the participating Spanish banks in Menéndez-Pujadas, Á. and M. Mulino (2020), “October 2020 Bank Lending Survey”, Analytical Articles, Economic Bulletin, 4/2020, Banco de España. 3  Secondly, the comprehensive nature of the monetary policy response has also been very important. It should be borne in mind that the COVID-19 outbreak in the euro area came about against a background of: low inflation and extensive monetary stimulus, with benchmark interest rates at a record low of -0.5%; net asset purchases under the asset purchase programme (APP); and a set timetable for the TLTROs. In this setting, the ECB measures have run along two main axes: the purchase of financial assets and the provision of liquidity to commercial banks, covering the euro area economy’s main financing channels. As regards asset purchases, I have already referred to the approval of the PEPP. The main aim of this programme is to ease financing conditions and ensure the smooth transmission of the common monetary policy to all euro area countries. As to liquidity provision, we should recall that, in the euro area, banks are the main source of financing for households, the self-employed and firms. It was therefore vital to head off a severe contraction in the flow of credit to the real economy.
Banks felt that they had to keep on dancing while the music was playing. Regulators could never prove that the risks they identified would crystallize, and the “top down” and “bottom up” dimensions of prudential supervision were not married. Central banks and the IMF discussed the imbalances for so long that some came to believe that they were crying wolf. And no one country could prevent the world wide increase in asset prices. Christopher Fildes’ law of the financial cycle says that “disasters happen when the last man who can remember what happened last time has retired”. Periods of euphoria and panics in the financial system are inherent features of a market economy. They are the cost we pay for the benefits of a market economy – long-run increases in our standard of living which other systems have failed to deliver. After another twenty years or so, memories of the Panic of 2008 will have faded, and the regulations put in place in its wake will no doubt be seen as old-fashioned, inhibiting of the potential of the City, and as ripe to be swept away as was the Glass-Steagall separation of commercial and investment banking in the United States a few years ago. A lesson of history is that few generations have been able to avoid a repetition of earlier banking crises. The essential problem is that we can no more bind our successors than our predecessors were able to bind us.

The group we are most concerned with are the vulnerable customers. We are focussing on cases of mis-selling to vulnerable customers and on cases where the products were clearly inappropriate for them given their circumstances. We have required the FIs to give priority to these cases. They should not take an overly legalistic approach to mis-selling in dealing with these cases. For cases where there are sufficient indications that the product was mis-sold or that it was clearly inappropriate given the investor’s profile and circumstances, the FI should take responsibility. Several FIs have assured MAS that they will take full responsibility in such cases. We welcome this commitment and expect all FIs that have sold these products to take the same approach. They must do the right thing and ensure a quick and fair resolution for these customers. We have communicated this to their CEOs. Thank you, I will now take your questions. 2  BIS Review 126/2008
Signing a bank deposit agreement or a loan agreement or buying an insurance product, individuals should have comprehensive information on the conditions, expected returns, the full cost of all services, their rights and obligations. The issue of hard selling of services has also been discussed at the State Duma for many years. We are developing an instrument whereby key information documents on financial products disclose compact and clear data to consumers regarding all the conditions. We are also addressing the topic of hard selling of extra services and various fees when individuals sign 5/6  BIS central bankers' speeches  a consumer loan agreement. At the end of last year, we issued an information letter obliging banks to include such additional ‘services’ (only so-called services because they generally provide no benefits to people) into the calculation of the total cost of credit. I have said ‘an information letter obliging’, but there is a contradiction here since these are only recommendations and, accordingly, they cannot oblige anybody. We propose that organisations should specify the total cost of credit from the very start so that people understand the actual costs for loan servicing. This will enable people to select more advantageous offers. However, we certainly need legislative changes. Such amendments have been drafted with the engagement of the Central Bank. They propose the introduction of a so-called open-ended cooling-off period, which will enable consumers to fully abandon any services foisted on them together with a loan (with the refund of all related payments).

Growth in the euro area has relied heavily on the ECB’s very accommodative monetary policy. While the area’s aggregate fiscal stance has ceased to be a drag on growth, we could benefit – in full respect of our rule-based fiscal framework – from a more growthfriendly composition of public finances, which would also support the necessary consolidation in Member states with higher debt levels. But it is also essential to try to regain momentum in the structural reform agenda, in order to increase the resilience of national economies and foster productivity and potential growth. The euro area governance reform agenda should not be let aside either. Progress in renewing the institutional architecture of EMU has been substantial, especially since 2012. At the height of the sovereign crisis, awareness of the vulnerabilities that were causing severe financial fragmentation and increasing risks of a break-up of the euro area generated the political consensus needed to establish permanent crisis-management mechanisms, strengthen fiscal and macroeconomic surveillance, and start developing a Banking Union. 7/9  Initially, reforms proceeded at a relatively rapid pace. At the beginning of 2012, two important treaties were signed: the European Stability Mechanism (ESM) Treaty and the Treaty on Stability, Coordination and Governance. The agreement in mid-2012 to move towards the Banking Union led to the setting-up of two of its pillars: the Single Supervisory Mechanism (SSM), in 2014, and the Single Resolution Mechanism (SRM), in 2016.
It is much more prudent and prosaic than hovering over the relocate button or rushing to the exit door. But re-structuring by firms will in general increase their complexity. I struggle to see an outcome in which banks and insurers do not get harder to supervise and harder to resolve for all involved. While the outbounds are a little further advanced in their planning than the ‘inbounds’ based in the EEA, I expect that – depending on any developments in the Brexit negotiations – we will see a large number of the latter apply to us for authorisation on the assumption that access akin to their current passporting rights to operate in the UK will fall away. Time and negotiations will tell whether that assumption will prove correct. If it is, authorisations are going to be a significant operational challenge for the PRA. Brexit poses some material risks to our objectives but we are well on the case in dealing with them. In April I wrote to the CEO of every affected firm about their Brexit contingency plans and received over 400 responses. Supervisors have carefully scrutinised each one and provided feedback where plans needed more work. We particularly want assurance that firms have considered ‘cliff-edge’ scenarios where there is no negotiated agreement for financial services in place when we exit, and the two sides do not reach agreement on issues such as transition, mutual recognition of standards, and co-operation in financial regulation or supervision.

First up, how the new accounting standard interacts with the bank capital framework here in the UK – a most enjoyable discussion, because you can never have too much of accounting standards. Next on the menu: consumer credit, of which you definitely can have too much. Some of the most difficult issues greeting our return, however, were not so domestic in nature. Would cross-border reinsurance contracts function properly in the wake of Hurricane Irma? How might a bad outcome on the Korean peninsula affect British banks and financial markets? Supervisors of the world's leading international financial centre have always had to juggle domestic and global risks. In between them, however, is a dynamic which is fundamental to retail and wholesale finance in the modern economy. It is a dynamic at play in the cliff-edge risks from Brexit and the differences of view between countries over Basel 3 finalisation. I am thinking of the impact of borders, location and distance on the shape of banks, insurers and financial regulation. Put simply: the impact of geography on the geometry of finance, a dynamic we might call 1  geofinance . With the revolution in regulation following the financial crisis coming to its end, and with changes to the geopolitical landscape looming large, I think that geofinance is likely to be the defining challenge of the next few years. The domestication of retail banking  Soon after the crisis I worked with the Independent Commission on Banking (ICB).
With this in mind, the CPSS will continue to closely monitor progress over the next year for any signs of slippage. BIS Review 60/1997  -5-  The search by individual banks for efficient ways to reduce their foreign exchange settlement risk has brought about important progress at the industry-group level as well. The Allsopp report noted the efforts of FXNET, S.W.I.F.T, ECHO, Multinet, and the Group of 20 banks to offer various types of risk-reducing services, and these ongoing efforts are very encouraging. Some banks are also exploring the elimination of settlement risk altogether by shifting the market to trades that simply settle the gain or loss associated with exchange rate movements -- called “contracts for difference” -- instead of requiring delivery of the underlying currencies. We are well aware that many market participants are currently debating what constitutes the most efficient multi-currency netting and settlement services. While there will be potential winners and losers, I believe that the market as a whole should ultimately benefit from this rigorous competition. At the same time, settlement risk reduction should not be used to justify the concentration of market power. The G-10 central bank governors have long been on record in favor of fair and open access to services that permit participation by a broad range of institutions, consistent with the prudent management of risk.

This is derived from the Shariah principles, the key pillar of Islamic finance. The Shariah injunctions require that Islamic financial transactions be accompanied by an underlying productive activity resulting in a close link between financial and productive flows. Under the risk sharing concept, there is an explicit risk sharing by the financier and the customer. In this arrangement, the real activity is expected to generate sufficient wealth to compensate for the risks. Parties to the transactions would thus be insulated from excessive risks exposure given that the Shariah prohibits the excess leverage and involvement in speculative financial activities. The intrinsic principle of profit and risk sharing thus provides an in-built check and balance to the Islamic financial transactions. A combination of these distinct features together with the implementation of prudential risk management standards and practices would contribute to the robustness and resilience of Islamic financial system. Mutual respect on Shariah matters This decade has thus been a phase of innovation in the global Islamic financial system with a number of breakthroughs and major milestones in innovative deals and structures. The advancement of sukuk, Islamic securitization, Islamic private equity, Islamic real estate investment fund and other financial instruments in terms of sophistication and product range has widened the international market reach of Islamic finance, particularly in the cross border transactions. At the same time, this phase is also seeing a number of key issues being raised, particularly in respect of divergence of Shariah views underlying a number of the Islamic financial transactions.
3  All speeches are available online at www.bankofengland.co.uk/speeches  3  For example, there has been considerable criticism of the Risk Margin - a new feature of Solvency II which aims to allow for uncertainty in liability valuations - and I agree that its current design and implementation does not achieve the intended goals. The concept of a risk margin is a sensible one, but its current implementation in Solvency II is flawed. Because the root causes of the problems are baked into European legislation, we need to fix them at source, and are actively and constructively engaged with our European colleagues to design a more sensible solution. Some firms would like us to ‘break glass’ and implement a unilateral quick fix here in the UK. But I think that would be a mistake at this stage, not least because in the short-term there is a mechanism available to firms to mitigate the impact on business written before the introduction of Solvency II, namely the Transitional Measure on Technical Provisions, or TMTPs. We have allowed all firms that applied and qualified to use this measure. And data reported to us by firms indicates that the TMTP benefit across the life industry at the inception of Solvency II almost entirely offset the aggregate Risk Margin.

Lively discussions after publication of the interest rate path There have been lively discussions on both occasions when the Riksbank has published an interest rate path. It is good that our forecasts and assessments are discussed. The fact that the Riksbank gives its view of the interest rate over a longer time span encourages this – the longer the time perspective, the greater the scope for differences in assessments. But the discussion that has arisen has often not taken this direction; instead it has focussed on market agents having been taken by surprise by the Riksbank. This is, of course, not the desired effect. The Riksbank aims to be predictable and from this aspect the experiences so far of publishing our own interest rate forecast have been not only positive. My view is that we are at the beginning of a joint learning process. It is unusual for the Riksbank to communicate its own interest rate path and it is unusual for market agents to relate to it. This is something that both parties will become better at as our experience in this field increases. We can also make some comparisons with when the Riksbank began to publish its inflation forecast. When the forecast was changed this sometimes led to a debate. BIS Review 111/2007  3  But after a time, everyone became used to the idea that the inflation path would be revised, and it will probably be the same case with the interest rate path.
Similarly, there are also lessons to be learned in regard to the experience in the communication of supervisory stress test results in Europe and the United States. Conclusion Given the dynamics of the financial markets today, more effective engagements between policy makers and the industry, both within and across borders have never been more important so as to bring about a greater awareness of key financial stability issues, to further sharpen supervisory and management judgements and to promote greater collaboration on multiple fronts. Enhanced prospects for greater global financial stability depend on a sustained commitment to these priorities. Ultimately, the goal is to strengthen our collective ability to anticipate and respond effectively to developments that affect financial stability, not just in these present challenging times, but through what will likely be an extended period of global adjustments going forward. 4  BIS central bankers’ speeches

For the SEEU countries data are available only on Croatia and Macedonia, from the IMF International Financial Statistics. Cumulatively, in this period in Croatia there was real appreciation of 9.1%, while in Macedonia there was real depreciation of 18.2%. 9  Source: EBRD Transition report 2007: November update and NBRM calculations. Data for 2007 are estimates. BIS Review 74/2008  3  due to lower competitiveness and higher consumption, is one of the main causes for the current account deficits, some of these countries are also experiencing deficits in the income balance, which mainly reflects repatriation of profits from foreign direct investments. Most certainly, such high current account deficits would not have been possible if there were not such large and continuous capital inflows in transition countries, mainly in terms of FDI, but also of portfolio and other types of investments. For example, in the period 1989-2007, total FDI amounted to around 3,600 USD per capita in the new EU member states and around 2,000 USD per capita in the SEEU countries. 10 Again, in the earlier years of transition, capital flows partially substituted for the insufficient savings in these countries and allowed for the necessary transfer of technology and expansion of production. However, there are concerns that, in the recent years, and particularly in the countries with fixed exchange rates, capital inflows are dangerously adding to domestic demand, thus putting further pressure on inflation and increasing imports.
Figure 4 Unemployment rate and annual growth in salaried employment (percent)  8  8  6  6 Unemployment rate  4  4 Salaried asalariado employment Empleo (a/ (y/y)  2  2  0  0 11  12  13  14  15  16  Source: National Statistics Institute (INE). BIS central bankers’ speeches  9  Figure 5  CPI inflation (*)  CPIEFE inflation (*)  (annual change, percent)  (annual change, percent)  6  6  6  6  5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0 11  12  13  14  15  16  17  18  0 11  12  Mar.2016 Report  13  14  15  16  17  18  Dec.2015 Report  (*) Gray area shows forecast as from first quarter of 2016. Sources: Central Bank of Chile and National Statistics Institute (INE).

BIS central bankers’ speeches  7  Table 1 International baseline scenario assumptions 2014  2015 (e) Dec.15 Report  2016 (f) Dec.15 Report  Mar.16 Report  2017 (f) Dec.15 Report  Mar.16 Report  Mar.16 Report  Terms of trade Trading partners' GDP World GDP at PPP World GDP at market exchange rates Developed ec's GDP at PPP Emerging markets' GDP at PPP External prices (in $  -1.8 3.4 3.4 2.7 1.7 4.8 -0.9  -4.2 3.0 3.1 2.5 1.9 4.0 -9.3  -4.5 2.9 3.1 2.4 1.9 4.0 -9.7  -3.8 3.2 3.4 2.8 2.1 4.4 -2.8  -4.2 2.9 3.1 2.4 1.8 4.0 -5.8  1.7 3.3 3.5 2.9 2.2 4.6 1.5  0.7 3.1 3.3 2.7 1.9 4.5 1.0  LME copper price $ WTI oil price $ Brent oil price $ Gasoline parity price $ Libor $ (nominal, 90 days)  311 93 99 731 0.2  249 49 53 466 0.3  249 49 52 467 0.3  220 43 45 373 1.0  220 40 41 398 0.7  230 49 52 384 1.6  230 45 46 420 1.5  (e) Estimate. (f) Forecast. Source: Central Bank of Chile.