samchain/econo-pairs-v1 huggingface dataset:
What a difference a century makes. A century ago, the Bank issued one speech a year. In 2016 alone, it issued 80 speeches, 62 working papers, close to 200 consultation documents, just under 100 blogs and over 100 statistical releases - in total, over 600 publications. That is around 9,000 pages or around four and a  17  Monetary Policy Committee (2013). Stockton (2012), McKeown and Paterson (2014). Warsh (2014), Bank of England (2014). 20 See Williams (2016a) for a discussion of one of these initiatives. 18 19  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  half million words. It would not be over-egging this pudding to call this a genuine revolution in central bank transparency. And this revolution has taken place, in central bank terms, at warp speed. The Benefits of Central Bank Communication  In lockstep with this evolution-cum-revolution in central bank transparency practices has emerged an academic literature seeking to understand, explain and assess the implications of this shift. This literature has been growing fast. Chart 7 plots the percentage of mentions of the words “central bank” followed by “communication” in English-language publications over the past 70 years. 21  It shows an exponential  increase. This literature provides a useful starting point for assessing the progress made so far by central banks in boosting their openness, the advantages this may have conferred and where future transparency efforts might best be directed. In theory, transparent communications confer two high-level benefits.

Just before Christmas, “Storm Barbara” hit the UK, causing widespread devastation to as many as a dozen umbrellas and blowing off several people’s hats. Yet advance warnings of Storm Barbara inspired  67 68 69  See Kahneman (2011) and Shiller (2017) for examples. See Thaler and Sunstein (2008), Adams and Hunt (2013) and Halpern (2015). For example, Haldane (2016). 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  81,000 tweets and 4,000 retweets. Polling by YouGov suggests that, since storms began being named, more than half of people have begun taking steps to prepare themselves. Storm-naming in the UK follows long-standing US practice of naming (very much more) extreme weather events. This began back in 1953. The evidence is that naming these events has increased significantly public awareness. Even the names matter. The death toll from female-named hurricanes in the US is higher than for male-named ones, even once storm-severity is taken into account. 70  Had “Storm Barbara” been  “Storm Brian”, several items of apparel may have been alive today. I am not suggesting central banks should start following this meteorological precedent to the letter. I am not sure naming the next sharp downturn in activity “Recession Andy” (much less “Depression Andrea” given the meteorologists experience with female names) would necessarily raise public awareness greatly. Nonetheless, making the impact of economic events on people’s lives as specific and personal as possible can help raise public awareness, understanding and preparation.
Over the last few months, leverage has generally fallen, especially among those institutions that were most highly leveraged. 20 The fall reflects, in part, recapitalisation efforts, lower risktaking as a result of more prudent lending standards, and the shedding of assets and/or limitation of the growth in balance sheets. It also reflects pressure from the market and supervisory authorities to control leverage, as well as expectations regarding the possible introduction of a leverage ratio, in addition to risk-based capital requirements. 21, 22 Likewise, capital position ratios of large and complex banking groups in the euro area are improving. The earnings of these banks have recovered, while the growth of total assets and of risk-weighted assets has slowed down and capital has increased, both from public and private sources. These developments were necessary in view of the expected increase in non-performing loans as a delayed result of the economic crisis. 18  W. Bagehot, “Lombard Street: a description of the money market”, Scribner, Armstrong & Co., 1873. 19  With regard to the importance of an accommodative monetary stance at the margin, see, for instance, T. Adrian and H.S. Shin, “Financial intermediaries and monetary economics”, Handbook of Monetary Economics, forthcoming. 20  It should be noted that this effect only arises when the impact of losses on the capital base is greater than the reduction in the value of marked-to-market assets on the balance sheet.

We must find a new equilibrium in which the financial system truly supports the real economy, encouraging a flow of balanced credit. The adjustment may not be immediate and it needs to follow a gradual path in order to arrive, in due course, at a new point of balance that allows a restoration of confidence not only among investors but also taxpayers. Everyone must play his or her part. The regulatory authorities have to agree quickly on the new system parameters, in consultation with the private sector. Macroeconomic policy must promote conditions for a gradual adjustment, in line with the objective of sustaining economic growth and the restoration of a financial market that efficiently performs its primary role as an intermediary. Market players must understand that the future cannot be a simple return to the past, to the pre-crisis situation. If we fail to reach the new equilibrium in due course we will have wasted not only the crisis but also the resources of taxpayers that have been used to save the system. This can only backfire on the system. 38  BIS Review 10/2010  Figure 1  Changes in credit standards applied to the approval of loans or credit lines to enterprises (net percentages of banks contributing to tightening standards)  Notes: The net percentage refers to the difference between the sum of the percentages for “tightened considerably” and “tightened somewhat” and the sum of the percentages for “eased somewhat” and “eased considerably”.
Victims of financial scams may call their bank's hotlines which are operating 24 hours a day, 7 days a week or NSRC's 997 hotline to lodge reports. I also wish to highlight that in trying to trace and intercept stolen funds, and to prevent further losses, time is of the essence. Therefore, victims must immediately call their banks or 997 as soon as they discover that they have been scammed. The NSRC will initiate an immediate response, but victims must make a police report to furnish more detailed information to allow the authorities to investigate the matter. The NSRC is an important element in our fight to combat scams. But, as they say, prevention is better than cure. In this regard, it is important that all of us take actions to protect ourselves from becoming victims of financial scams. Each and every one of us should remain vigilant and on guard to safeguard our banking information. In the Financial Capability and Inclusion Demand survey which BNM recently conducted, one third or 37 percent of respondents stated that they would be willing to share their bank account passwords or PIN numbers with their close friends! This statistic is indeed very troubling. We must take responsibility of our banking security credentials just like how we should take good care of our prized possessions. We also need to ensure that our computers and mobile devices are secure and running up-to-date software. Remember not to download files or applications such as Android Package Kit from unverified sources or links.

And third, we will retain our stock of assets for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. Moreover, this sequence doesn’t depend on the fiscal uncertainties that can appear in member states. The Governing Council is clear about the fact that there is no fiscal dominance in the euro area and no influence of any national fiscal policy on our common monetary policy. Flexibility – Our sequence is clear but the details of implementation are flexible and state1/3  BIS central bankers' speeches  dependent. We have included several options to deal with incoming data. Let me illustrate this on two points: One frequent focus of speculation is the precise timing of the first increase in interest rates and the path of policy rates thereafter. Obviously, we have to consider here the trade-off between more clarity today and flexibility tomorrow. It is true that forward curves beyond the second half of 2019 are somewhat volatile. But for the time being, this volatility is relatively modest, and certainly so for interest rates that matter for the economic decisions of households and corporates. Therefore the trade-off currently favours keeping our options open. I wouldn’t see any value in trading off our flexibility tomorrow against more clarity today but as we approach the summer of 2019, the balance will shift in favour of detailing our forward guidance. We also have flexibility over reinvestment.
So transposed to Swedish conditions, around SEK 2 000 billion is at stake. This happens to be in the same order of magnitude as the balance sheet total of three of the four major Swedish banking groups. And, of course, this kind of shock to the national economy would not spare the country’s citizens in their role as taxpayers. Financial crises impact severely on the public treasury. A recently-presented British investigation – the so-called Vickers report – shows how the  BIS central bankers’ speeches  1  financial crisis, since 2007, has increased the United Kingdom’s public net debt by about 100 per cent of GDP. Basel III is strengthening the system’s airbags… The crisis of recent years has made us painfully aware of the financial system’s vulnerability and its importance for the real economy. The need for bigger and better airbags is obvious. These lessons lie behind the global Basel III agreement. The most important areas of Basel III deal with the quantitative requirements for capital and liquidity being placed on the banks. …with a substantial amount of equity… The Basel Committee’s analysis has concluded that the banks need substantial resilience. The crisis has shown the risk of considerable losses. So capital requirements are being increased in Basel III, above all for Common Equity Tier 1.1 The minimum requirement for the banks’ equity is being set at 4.5 per cent of riskweighted assets – more than double the requirement under Basel II.

I hope that these reports will be interesting reading and thank you for having me here today. 6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  14  BIS central bankers’ speeches
And even if it is possible to model credit risk for, say, a bank’s mortgage book, it is much more difficult to model the complex and often obscure relationships between parts of the financial sector – the interconnectedness – that give rise to risk in periods of stress. Moreover, allowing banks to use their own models to calculate the riskiness of their portfolio for regulatory capital requirements opens the door to the risk of gaming. Deliberately or otherwise, banks opt for less conservative modelling assumptions that lead to less onerous capital requirements. Though the supervisory model review process provides some protection against this risk, in practice, it can be difficult to keep track of what can amount to, for a large international bank, thousands of internal risk models. The underlying principle of the Basel 3 risk-weighted capital standards – that a bank’s capital should take account of the riskiness of its assets – remains valid. But it is not enough. Concerns about the vulnerability of risk-weights to “model risk” call for an alternative, simpler lens for measuring bank capital adequacy – one that is not reliant on large numbers of models. This is the rationale behind the so-called “leverage ratio” – a simple unweighted ratio of bank’s equity to a measure of their total un-risk-weighted exposures. By itself, of course, such a measure would mean banks’ capital was insensitive to risk. For any given level of capital, it would encourage banks to load up on risky assets.

Inventories fell substantially in the first quarter, partly due to the rebound of mining exports, but there is also less disposition to keep inventories in other sectors. Business confidence in the industry, as measured by the Indicator of Business Confidence (IMCE), has declined significantly and the domestic-demand-related sectors are below neutral, as of last May. The lower growth in final demand and the larger increase in exports have also translated into a faster reduction of the current account deficit, which closed the first quarter at 3.1 percent of GDP (3.4 percent in end-of 2013). At trend prices, the current account deficit has also been adjusted substantially (figure 4). Despite two quarters of economic slowdown, the unemployment rate is still low by historical standards. Some deterioration has been seen in salaried job creation, counteracted by a surge in self-employment. Vacancies are also growing less. At any rate, nominal wages showed an acceleration, but this becomes a moderation when expressed in real terms. Since last October, the Board has cut 100 basis points off the policy rate, helping to reduce short-term interest rates and also long-term financing costs, on occasion to record-low levels. For instance, interest rates on Central Bank indexed bonds at 5 and 10 years are in historical minimums, while the nominal rates of the same bonds are near them (figure 5).
A temporary and targeted backstop purchase facility for gilts proved effective in ending the firesale dynamic, providing the LDI funds with a window to increase their resilience while minimising risks to public funds, market incentives and the stance of monetary policy – which, unlike in 2020, was now in a tightening phase. [3] In my remarks today, I want to discuss four main lessons that I take from those events: 1. The changing nature of systemic liquidity risk: though focus naturally alights on the idiosyncrasies of the autumn fiscal announcements and the UK LDI sector, the real import lies in the features the events had in common with the dash for cash and other similar developments: another reminder, if more were needed, that we face a new era of liquidity risk, originating outside the banking system, that can amplify shocks, destabilise core markets and undermine monetary and financial stability. 2. Public backstops vs private self insurance: as a central bank it fell to us to provide a public backstop to prevent systemic liquidity risk from undermining monetary and financial stability. At the same time, the events revealed material weaknesses in pension fund and LDI risk management. Given the costs involved, we must ensure public backstops do not end up substituting for a failure to achieve the appropriate level of private insurance against liquidity risk here and elsewhere in the non-bank sector. 3.

Other regulatory measures, such as the LCR or the NSFR, are found to have had no statistically significant impact so far on repo volumes. The study also highlights that the more significant falls in banks’ outstanding repo volumes at year-end are likely to have also been driven by additional factors, such as contributions to the single resolution fund or national bank levies. These findings are not the final word on the matter, of course. The repo market is in a state of transition as the report by a study group of the Committee on the Global Financial System (CGFS), chaired by Bank of England Deputy Governor Jon Cunliffe, recently concluded. In this respect, the CGFS also recommended in April that a further study on repo markets be undertaken within the next two years. This means that policymakers will continue to closely monitor developments in repo markets and financial markets more generally. Some effects can only be thoroughly assessed once the reforms have been implemented more meaningfully, while others may become clearer at an earlier stage. For example, it seems undisputable that regulatory reforms have contributed to temporary volatility in repo market activity on reporting dates. Specifically, window-dressing behaviour of banks appears a likely unintended effect of regulation. I would therefore encourage further analysis of methods that could help reduce volatility and thereby contribute to a smoother functioning of markets.
According to an analysis conducted by Eurosif, through a quantitative survey and qualitative interviews of asset managers and owners operating in Europe, one of the most frequently mentioned challenges is a lack of data necessary to comply with European Union regulations. Some respondents commented that they currently use SFDR-related data merely for compliance reasons and do not consider them to be decision-useful information. However, the responses gathered during the qualitative interviews indicate that this view could change as the coverage and reliability of these data increase.6  6  See Eurosif (2023). Climate-related Data: The Investors’ Perspective. Report, May. 6  We have a new challenge to add to definitions and transparency, the previous ones I mentioned, namely, the quality of the information. Finally, we cannot forget that we are in a global world, and even more so insofar as sustainable finance and investments are concerned. Global definitions, disclosure requirements and information would contribute to the mobilisation of financial resources for projects that contribute to the transition to a net-zero economy. To the extent that definitions, disclosure requirements and information are local, the possibilities of facilitating a global shift towards projects that contribute to the transition to a net-zero economy will be smaller. Conclusion I have focused my address on green bonds and sustainability-linked bonds but I am aware that the family of sustainable instruments is growing. Indeed, I have not mentioned sustainable bonds, transition bonds, social bonds, blue bonds or bonds related to biodiversity. Each of them has its own challenges.

The main characteristics proposed by the European Commission are: - Taxonomy alignment: meaning that the funds raised by the bond should be allocated to projects that are aligned with the EU taxonomy. - Transparency as to how bond proceeds are allocated, through detailed reporting requirements. - External review: all European green bonds must be checked by an external reviewer to ensure compliance with regulations and taxonomy alignment of the funded projects, and,  2  See ECB (2023). Towards climate-related statistical indicators. Statistics Committee of the European System of Central Banks. January. 3  - Supervision by the European Securities Markets Authority (ESMA) of the reviewers. This means that external reviewers providing services to issuers of European green bonds must be registered with and supervised by ESMA. The European Council and the European Parliament have this year reached a provisional agreement on the creation of this European Green Bonds Standard. Pending the final text, a very important element of the proposal is that the standard will be voluntary. The European Central Bank issued an opinion in 2021 on the proposal for a regulation on European green bonds,3 which it welcomed. Regarding its voluntary nature, the ECB considered that, in the short term, a strictly mandatory standard might lead to divestment from non-taxonomy-aligned green bonds and a sudden drop in Union-based green bond issuance.
Public institutions and private companies are equally called upon to engage in a high level of cooperation and coordination beyond competition, even if, and especially where no individual business case can be made. The scope of preparations for the Year 2000 is unprecedented in many dimensions. I cannot think of any other project which requires a similar degree of cooperation and coordination within and across organisations, industries, sectors and countries. Features of the Swiss case Even though preparations are generally making good progress in Switzerland, the country’s readiness chart exposes areas in which efforts will have to be strengthened. As far as the financial sector is concerned, which will be the focus of my remarks, there are some special structural characteristics involved in solving the Year 2000 problem. Our financial centre is the home of some large global players in the banking and insurance sectors as well as the place where numerous cross-border customer relationships are concentrated. We are, therefore, exceptionally vulnerable to international shocks. On the other hand, this also means that we must take on more responsibility with regard to the risk of inflicting damage on third parties through our own failure. A second phenomenon, which is germane to Switzerland, is the fact that - in comparison with other countries - the two big banks, CS and UBS, garner a very significant share of all banking transactions. Without doubt, this results in a high concentration of risk, but also yields some significant advantages.

They are, therefore, not likely to face any outflows of deposits. The Swiss franc money market, on the other hand, is dominated by the two big banks. These play a key role in ensuring the stability of the system and therefore must shoulder a heavy responsibility. Role of the Swiss National Bank Central banks also play a significant role in the preparations toward securing liquidity. They are the providers of central bank money which is the medium with which the final settlement of payments is carried out. I would like to give the following brief outline of our plan:  1. Banks and the public can count on our providing the liquidity necessary for coping with the millennium generously and flexibly, i.e. by maintaining a continuous presence in the market. I do not think that there is any basis to the objection that such a promise will lead to a moral hazard. Firstly, because the liquidity planning of each bank is monitored and enforced by a supervising body. Secondly, because we will create liquidity on a collateralised basis only. 2. We will provide liquidity with the usual monetary policy instruments on a spot and - if appropriate - forward basis. We are aware, however, that the processes connected with the individual instruments differ considerably as regards their vulnerability to malfunction or breakdowns. Settlement of a foreign exchange purchase against Swiss francs, for instance, is relatively complex and therefore exposed to a non negligible operational risk.