samchain/econo-pairs-v1 huggingface dataset:
5  And as recommended in the recent Group of 30 (G30) Report, “Financial Reform: A Framework for Financial Stability”. BIS Review 6/2010  3  ABCP, and SIVs The same is true of the Asset-Backed CP market. These vehicles are similarly reliant on committed lines of credit from commercial banks and, furthermore, in many cases were sponsored and managed by a bank. The case of Structured Investment Vehicles was subtly different. Some were sponsored by banks but did not have committed lines from them. Other SIVs were independently managed. With hindsight one fairly obvious solution would have been for banks to consolidate, for accounting and regulatory purposes, any such vehicles that they sponsored, managed and provided credit lines for. Looking ahead, banks should perhaps quit using such devices to move assets off balance sheet while retaining de facto control. Supervisors should be alert to such devices in future. They might consider whether consolidation for these and other vehicles could be avoided only where a sponsor had made it 100% clear that they would not provide any support in any circumstances. Securities dealers The case of securities dealers is different – in that they were real businesses which had developed over many decades. After Big Bang – in the 1970s in the US, and a decade later in the UK – their balance sheets grew.

It has become commonplace that shadow banking somehow exacerbated the boom, and complicated the rescue efforts of the authorities during the bust. 1 That is true. But there has been relatively little discussion about what this means for policy. We do not need to get too bogged down in defining what is meant by “banking” here. I mean it simply to refer to firms that take on-demand or highly liquid deposits, and use those liquid savings to provide term loans to households, firms and other parts of the financial system. Banks are, therefore, absolutely central to the monetary and payment system; and they are also vital to the credit system. They are leveraged; they run maturity mismatches; and their net worth is often uncertain. So they are exposed to runs, with spillovers to the rest of the system and the economy more widely. Reflecting that, they have long functioned within the terms of an established social contract with the authorities. 2 It has involved industry-financed deposit insurance (and now special resolution regimes); prudential regulation and supervision; and liquidity insurance from central banks. That regime reflects the spillovers (“negative externalities”) that flow from bank failure. But precisely because the regime aims to place a higher weight on the safety and soundness of banking than banks and their shareholders would themselves, it sets up incentives for some types of business to be booked outside the banking system.
Third, by disclosing the criteria by which we value assets, we can set a standard that others will follow. And market neutrality – which should take into account the mispricing of climate risks – should not put a brake on carbon neutrality. II.B. Inequalities  Page 7 sur 9 Monetary policy inevitably has redistributive effects. It transfers revenue between lenders and borrowers, and affects asset prices and hence wealth. The evidence is preliminary but it suggests that the effects of more accommodative monetary policy has reduced income inequality by boosting revenues thanks to increased employment for the lowest parts of the income distribution and diminishing savings revenues at the highest end. On wealth, the jury is still out, as the middle class benefited from the rise in housing prices, but the better-off could have benefited still more on their financial assets. That said, fiscal policy is and should remain the best tool for fighting inequality as it can be more targeted than monetary policy. This is especially true in Europe; thanks to our social model. Indeed, the debate about inequality and monetary policy seems to be somewhat less passionate on our side of the Atlantic. However, to the extent that ECB programs currently support governments borrowing and fiscal policy, we can see this as an indirect channel to reduce inequalities. II. C. Financial stability Financial stability is related to the inequality debate: the common link is the level of asset prices. The question of asset bubbles is not reserved for economists or financial markets.

The inflation surge could nevertheless be transient, and then hopefully stabilise in a new regime of “controlled reflation”. The jump in euro area headline inflation in early 2021 did come as a surprise (it rose from -0.3% to +1.3%); Nonetheless, the causes of this increase are temporary in nature, like the recent rebound in oil prices, the reversal of the VAT rate cut in Germany and from modified weights in the HICP basket. Over the medium term, the persistence of substantial economic slack over the projection horizon, despite a significant  Page 5 sur 9 recovery from the second half of this year, will weigh on inflation. All in all, the March 2021 ECB projections show that headline inflation would remain weak, at 1.4% in 2023. Inflation is therefore not yet where we would like it to be, back towards 2% over the medium term. Our inflation objective must be understood as simple, symmetric and medium-term oriented. iii “Simple” means that we could reexamine oversophisticated qualifiers still associated with the 2 % figure. “Symmetric” refers to the fact that our objective is a target and not a ceiling: we might be ready to accept inflation higher than 2% for some time. Finally “medium term” means that we assess inflation performance over a long enough period, looking forward, but also not ignoring the past.
BIS Review 92/2001  3  Despite the generally positive impact of capital liberalisation on the growth prospects of the accession countries, one should bear in mind that the speed of capital account liberalisation may carry risks for countries with underdeveloped financial sectors, especially in a context of fixed or tightly managed exchange rate regimes. If not carefully sequenced and supported by consistent macroeconomic and structural policies, capital account liberalisation could pose some risks to macroeconomic or financial stability in the accession countries. It is therefore crucial that the right policies are put into place before EU accession. 5. Financial sector structure and functioning  The last issue I would like to elaborate on concerns the structure and functioning of the financial sector in the accession countries. Partly for historical reasons, the financial sector in the accession countries is largely dominated by the banking sector, whereas other financial sector intermediaries still need to be further developed. Over the past few years, significant progress has been made in restructuring and consolidating the banking sector. This progress has been accomplished through the large-scale privatisation of state-owned banks and through the extensive opening-up of the banking sector to foreign ownership. Undoubtedly, this process has contributed to greater integration with the EU and significant efficiency gains. It has also supported the strengthening of financial stability and provided the banking sector with know-how and capital. However, the degree of financial intermediation remains rather low and the challenges ahead are considerable.

Together these banks account for around 73% of the stock of lending to UK households and corporates. I should also note that a significant number of other institutions are close to signing up too and we will update this table in due course. In addition, we will publish the first set of drawdown data in December, although you will have seen that one bank has already announced that it has drawn £ and plans to draw more. That said, it will probably take some time for banks to review fully their lending plans, and it is likely that drawings from the FLS will be spread out over the full window to end-2013.
In the journey to find purpose and passion in life, always be curious, take risks and differentiate yourselves from everyone around you. The fact that ‘change is the only constant’ tells us that the world is ever evolving and all of us are constantly addressing curve balls and wildcards that life throws at us. The talk of job displacements, the rise of Artificial Intelligence, FinTech, InsurTech and the New Industrial Revolution will certainly change the world that we live in. In those, there are challenges, but there are opportunities as well. Thus, no matter in what stage of life you are in – you need to stay relevant, always strive to be different by innovating yourself. Above all, I must say, savour the experience and find personal meaning, purpose and enrichment along the way. While many of you embark on your journey of discovery, it is important to take heed of the wisdom of the wise on what may appear as uninteresting lectures on financially planning for your future. As the saying goes failing to plan, is planning to fail. It is alarming that although 40% of Malaysians consider themselves financially ready for retirement, a retiree would need an estimated minimum of RM228,000 in today’s value upon retirement to generate sufficient income to live above the poverty line for the next 20 years. It is even more worrying to see only 18% of Malaysians, that is less than one fifth, actually have that exact sufficient amount of EPF savings.

The teams include representatives of the Association, which is a very positive fact. We are already going into the stage of intense communication and joint work with the ECB. I strongly hope that the political process, with all its unpredictability and uncertainty, will ultimately support, not block, the overall progress of the accession to the euro area. And keeping this hope, I would like once again to congratulate the Association, its management, secretariat, and all its members on the 30th anniversary and to wish you good health and much success. 3
Big tech companies like Apple and Google have begun to show an interest in payments. Some big tech companies already have a lot of customers on their platforms. If they add payments with some auxiliary services that make them attractive, such as discount offers, it may not take long to achieve a critical mass of users. If the really large international big tech companies begin to seriously offer bank-like services or own currencies, this could entail a major change in the financial system. However, it isn't always the case that the new participants compete with the banks. They often cooperate with the banks. 10 A large part of the innovation process is with the banks. Swish and Bank ID are a couple of Swedish examples that the banks have initiated. However, it is possible that the banks will be inspired by new, innovative companies and that they will be forced to invest greater resources on development when there is external pressure to change. One possible development is that the boundaries between banks, payment service providers and FinTech companies will be erased in the future. A further challenge on the market is cryptoassets (or cryptocurrencies as they are sometimes called), such as bitcoin. These are private currencies that have no state backing. In the case of bitcoin, one has tried to replace the state’s function as guarantor for money with technology that limits the supply.

Sources: National central banks and the Riksbank  Figure 8. Rising housing prices in relation to disposable income Index 1995 Q1 = 100 250 200 150 100 50  95  00  05  10  Sweden  Denmark  Norway  USA  Finland  UK  15  20 Canada  Note. Quarterly data. The index shows nominal house price index in relation to nominal disposable income per capita. Source: The OECD  32 [35]  Figure 9. Household liabilities an increasing part of disposable income Index, 1995 =100 250 200 150 100 50  95  00  05  15  10  Sweden  Denmark  Norway  USA  Finland  UK  20  Canada  Note. Index shows household debt as a percentage of disposable income. Sources: OECD, Statistics Sweden and the Riksbank  Figure 10. Size of the Riksbank’s balance sheet has varied substantially over time Per cent 30 25 20 15 10 5 0 1800  1825  1850  1875  1900  1925  1950  1975  2000  2025  Note. Riksbank’s total balance sheet as a share of GDP. Source: The Riksbank  33 [35]  Figure 11. Many central banks’ balance sheets have grown Per cent of GDP 140 120 100 80 60 40 20 0  16  17  18  19  20  The Riksbank ECB Federal Reserve  21  Bank of England Bank of Japan  Note.
The risks, when highlighted, often temporarily overshadow the long-term gains, which arise in small incremental doses over a long period. Unfortunately, short-term conditions came sharply into focus just when the Swedish people were about to vote, as attention was turned to the global economic slowdown and its effect on the euro area, particularly in the major countries. GDP growth in Germany and France is forecast to decline from 0.2 per cent and 1.3 per cent respectively in 2002 to 0.0 and 0.3 per cent in 2003 (Riksbank forecast). This is the poorest rate of growth in these countries in over a decade. In the debate on the euro, this contraction in growth was largely attributed to the limitations imposed on these countries’ economic policies, as they did not have a national monetary policy, and to the fiscal policy constraints of the Stability and Growth Pact. As we know, the budget deficits of both Germany and France have in both 2002 and 2003 exceeded the reference value of 3 per cent of GDP, which was established in the EU’s Stability and Growth Pact. At the same time, attention in the debate was drawn to the temporary and one-off rise in prices of certain goods that occurred when prices were rounded after the introduction of the euro. In light of this, it is understandable that many voters got the impression that there were no economic benefits of participation in the euro.

Furthermore, by replacing 12 currencies, in particular the German mark and the French franc, the euro was used immediately as a reserve currency by central banks and became part of a currency basket (for example in Morocco) or a solitary anchor for the exchange rate policy of some countries (like Estonia, Bosnia and Bulgaria). Nevertheless, two-thirds of world reserves are still held in US dollars compared with less than 15 per cent in euros, although since the euro’s introduction there appears to have been a gradual shift in the composition of the reserves of large economies such as Russia, and even China, towards an increased share for the euro. All this points to larger income to the euro area from external holders of the euro, a small but not insignificant gain given that estimates of US seignorage income from external holders of the dollar is estimated at almost 1 per cent of GDP. The euro is also bound to increase the efficiency of euro area financial markets. The use of the euro in the international debt market has increased compared with the joint share of its preceding currencies. The share of international bonds denominated in euros and issued by non-euro area residents has increased to about 30 per cent, compared with 20 per cent for the currencies that preceded the euro.
Denis Beau: The role of cryptoassets in the payment system Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Official Monetary and Financial Institutions Forum (OMFIF) Meeting, London, 15 October 2019. * * * Ladies and gentlemen,  The payment landscape is currently dominated by a bank-based ecosystem, an interchangeable use at par, of commercial bank and central bank money as settlement assets, and an anchor role for central bank money which is the sole settlement asset with legal tender status. It is certainly an understatement to say that this landscape may be significantly altered given technological developments and changes in consumer preferences underway. As these developments and changes unfold, both the « front-end » arrangements that ensure the interaction between the payer or payee and the payment service provider, to initiate or receive payments, and the « back-end » arrangements that transfer information and funds between the payer and the payee, will change. With the emergence of so called « crypto assets » like the bitcoin and so called « stablecoins », we may also see new  settlement assets develop which may compete against and possibly, according to their promoters, replace commercial and central bank money as settlement assets at the center of our payment systems. For the time being, in spite of their rapidly growing number and variety, crypto-assets only account for a marginal share of assets held by economic agents.

Jean-Pierre Roth: Inflation and economic activity – are we at a crossroads? Summary of a lunchtime discussion by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the “Geneva Financial Center” organisation, Geneva, 28 August 2006. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  While the world economy is experiencing exceptionally vigorous expansion and inflationary pressure is contained, there is still a certain amount of uncertainty. Will the economy turn down again and inflation accelerate? The Swiss National Bank is not working with a scenario of imminent weakness in the global economy, even if the rate of growth slows somewhat. Certainly, the US economy appears to be heading for a soft landing, and economic activity in Europe is also likely to increase less rapidly in the second half of the year. On the price front, the recent surge in inflation in the consumer price index was largely attributable to the cost of goods and services directly linked to energy prices, while core inflation remained at a relatively low level. Given the slowdown in global spending and the normalisation of monetary conditions, inflationary pressures are likely to remain restrained. This assessment also applies to Switzerland.
European leaders have a great opportunity to rectify the now apparent failings of EMU’s institutional structures. In particular, the financial market architecture must be at the centre of our discussions on the future of EMU. The intellectual foundation of the monetary union is Robert Mundell’s insight that exchange rate stability, financial integration and national monetary policies are incompatible objectives: a concept that has been called “Mundell’s trilemma”, or the “impossible trinity”. We now find ourselves bound by a concept that Dirk Schoenmaker has called the “financial trilemma”: 7 namely, that pursuing simultaneously financial stability, financial integration and national financial policies is unfeasible. Any two of the three assignments can be combined, but not all three. In this crisis, financial integration in the euro area but national responsibility for financial policies has resulted in financial instability. We can solve this trilemma either by going back to financial markets delimited by national borders or by passing financial and crisis management policies to the euro area level. The latter is the only viable solution. It is the most conducive to economic growth, as it will help European companies and households reap the benefits of a single financial market based on a deep pool of savings. Some institutional reforms have already been undertaken. They represent a great step forward. We have made national fiscal policies more responsible under the Fiscal Compact, and subject to stronger surveillance. We have created a permanent solidarity framework – the European Stability Mechanism.

If deregulation is to improve competition and efficiency, banks must be free to adjust their pricing not just on interest rates but  BIS Review 3/2001  1  also on fees and charges. I have absolutely no argument with this. However, I very much hope that banks will display some sensitivity on this, and will bear in mind the public interest. They should also ensure that their pricing is transparent, and that customers have good notice of any changes. 7. In addition to interest rate deregulation, there are a number of other market reform measures originating from the consultancy report published a year or so ago which are still being progressed. For example, later this year we will consider whether there should be some further relaxation of the restriction on the opening of branches by foreign banks which have entered the market since 1978. We also plan to review whether the three-tier system of authorisation might be reduced to two tiers, although we do not plan to visit this issue until next year – i.e. 2002 - and have quite an open mind on this. This is rather later than we originally intended. But it reflects the fact that we believe that the present system is working reasonably well and that there is no pressing need to change.
Contrarily, some of the larger losses have been in regions where income was already-low – Northern Ireland (18% lower than the UK average) and Yorkshire and Humberside (14% lower). Put differently, since the crisis the regional distribution of incomes has widened. This widening of the income distribution means that aggregate GDP figures may over-state somewhat the impact of the recovery on societal well-being: gains by the already-rich boost well-being by less than equivalent losses by the already-poor. To demonstrate that, Chart 12 plots an illustrative measure of “social welfare”. This is constructed by aggregating up regional measures of well-being on the assumption they have a logarithmic relationship with GDP per head. 9 This is plotted alongside aggregate GDP per head. Although conventionally-measured GDP per head has recovered to above its pre-crisis peak, the same is not true of aggregate well-being, so defined. It fell after the crisis and has remained at those lower levels over the past three years; it currently stands just below its 2007 peak. In other words, in a subjective well-being sense, there may have been no real recovery in the UK over the past few years. If we turn from income to wealth, the picture is much the same. Chart 13 plots median wealth on a regional basis since 2007. This has risen across all regions.

In order to produce a forecast that reflects a reasonable trade-off in monetary policy, we have also drawn up a set of guidelines, which are presented in the Inflation Report. The criteria cannot provide an absolutely precise guide as to how the interest rate should be set, but points to factors we should have considered and assessed. The central trade-off is between inflation prospects and the prospects for capacity utilisation in the economy, expressed in the chart by the output gap. The projections were published in Inflation Report 3/06. If monetary policy is to anchor inflation expectations around the target, the interest rate must be set so that inflation moves towards the target. Inflation should be stabilised near the target within a reasonable time horizon, normally 1-3 years. The inflation gap and the output gap should also be in reasonable proportion to each other until they close. Let me now look at monetary policy within a theoretical framework. In the literature on optimal monetary policy, the trade-offs are often specified in the form of a loss function, which the central bank attempts to minimise. In principle, many goal variables can be included in such a loss function, but it is normal to assume that inflation and the output gap are included. The cumulative loss can then be expressed by the following equation:  Here is inflation, is the inflation target and y is the output gap. is a discount factor.