samchain/econo-pairs-v1 huggingface dataset:
Activist monetary policy would have resulted in instability migrating from the financial to the non-financial sector. In tackling the credit cycle, monetary policy may have, in Irving Fisher’s language, “aggravated rather than neutralised” the business cycle. Econometric evidence tends to support this view. Model-based simulations by the IMF suggest the need for two instruments to tackle efficiently real as well as financial imbalances (IMF (2009)). And the empirical evidence in Bean et al (2010) suggests that monetary policy may be a rather ineffective instrument quantitatively in constraining credit growth. This suggests that assigning monetary policy the task of tackling financial imbalances may be inefficient, perhaps ineffective. Charts 18 and 19 plot credit cycles in the UK and US from 1880, together with the different monetary policy regimes which have operated over this period. Strikingly, credit cycles dynamics appear to be largely invariant to the monetary policy regime – fixed or floating, rules or discretion, lax or tight. This, too, is indicative evidence that monetary policy may not be the most effective tool for moderating credit fluctuations. Third, micro-prudential policy aimed at tackling financial imbalances in individual financial institutions may also be ineffective for dealing with aggregate credit cycles. That is because bankspecific actions will not, by themselves, internalise the spillovers that arise across banks over the credit cycle. At best, this means that micro-prudential actions may be impotent in curbing the credit cycle. At worst, however, it could mean that bank-specific prudential actions are counterproductive.

Using the rankings of each correlation in the pooled sample, a normally distributed test statistic is constructed, under the null that the two samples are drawn from the same distribution. 23  Jennrich’s test for the equality of two correlation matrices derives a chi-squared distributed test statistic from transformations of the correlation matrices, including a term correcting for the bounded support ([-1,1]) of the difference between two correlations. The null is equality of the matrices. 18  BIS Review 168/2010  Chart 14 Dispersion of equity returns of major UK banks and top UK 100 PNFCs (by market cap)  Source: CapitalIQ and Bank calculations. Chart 15 Dispersion of ROE of top 10 UK banks and top 10 UK PNFCs (by market cap)  Source: CapitalIQ and Bank calculations. BIS Review 168/2010  19  Chart 16 Cumulative distribution function of cross-country correlations of credit cycles  Source: Bank calculations  Chart 17 Cumulative distribution function of cross-country correlations between medium term GDP cycles  Source: Bank calculations. 20  BIS Review 168/2010  5. Curbing the credit cycle  Taking together the evidence from Sections 2–4, what are the implications for public policy? First, according to the model a credit cycle arises from a collective action failure among banks. The lending decisions banks take, while individually rational, are collectively suboptimal. Specifically, individual banks may fail to internalise the reputational externalities their lending actions impose on others.
This was one of the key motivations behind PBE – to harness the skills of economists in ways which most benefitted charities. 31  For further details see: http://investors.crisis.org.uk/. 32  Citizenship Survey 2010/11. 12  BIS central bankers’ speeches  And what is true of economists is no less true of other professions and occupations, whose skills might be better targeted and harnessed than at present. It is known that using their skills is more likely to persuade someone to volunteer in the first place. 33 One example of that would be the charity “Datakind”, which harnesses the skills of budding data scientists to help solve social problems. More generally, the potential to improve further such skillmatching between volunteers and charitable activities is considerable. Employer incentives It is in employers’ power to make volunteering work in their firms – for example, by allowing flexible working hours or a certain amount of paid volunteer leave. It is also, as I have discussed, potentially in their own interest from a satisfaction and productivity perspective. A number of employers appeared to have heeded that message. For example, in 2011 the Civil Service began formally encouraging civil servants to spend one day a year volunteering – “to turn the civil service into a civic service”. 34 My home institution, the Bank of England, adopts a similar approach. In support of this, volunteering England provide online guidance to help employers set up Employer Supported Volunteering (ESV) schemes.

Figure 12: The average lifetime cost of risk factors associated with sexual exploitation Average cost per individual  Preintervention Postintervention Control group  Going missing  Substance abuse  Accommodation Total needs  £  Disengagement from education £  £  £  £  £  £  £  £  £  £  £  £  £  £  Source: PBE (2011). BIS central bankers’ speeches  25  Figure 13: Benefit of Centrepoint intervention to the public purse, average per Centrepoint client Central scenario £ 2010/11 prices) 6,989 12,332 2,639 46 188 117 –136 22,174  Avoided welfare benefits Tax raised Crime (avoided costs) Mental health issues (treatment costs avoided) Class A drugs (treatment costs avoided) Cannabis (treatment costs avoided) Alcohol (treatment costs avoided) Benefit of Centrepoint intervention to the public purse Source: PBE (2013). Note: row totals do not add to the total benefit due to rounding. Figure 14: Reasons for not participating in volunteering-related activities, 2010/2011 (% of respondents) Work commitments  60%  Doing other things with spare time  34%  Looking after children/the home  31%  Studying commitments  14%  Not knowing any opportunities to help  14%  Not knowing of any groups needing help  14%  Looking after someone elderly or ill  8%  Feeling too old  3%  Feeling too young  1%  Source: UK Civil Society Almanac (2014), Citizenship Survey (2010/11). 26  BIS central bankers’ speeches
In the aftermath of Long-Term Capital, we need to pursue these leverage-related issues, and others, in conjunction with our colleagues at the Federal Financial Institutions Examinations Council. The insights that we gain should be of value to bank supervisors, and for the study of the Long-Term Capital matter that is to be done by the President’s Working Group on Financial Markets, announced by Secretary Rubin last Friday. BIS Review 78/1998

Multilingualism is important in our world today not only in terms of communicating and advancing in the global economy, but also in order to understand other cultures. It is important because we need to know more about other nations’ cultures and history to improve world relations. In this regard, in October 2004, the Bank entered into an agreement with the Embassy of the Republic of France for the provision of French lessons to members of staff. To date several members of staff have benefited from this programme and can comfortably speak, write and understand the French language. Ladies and Gentlemen, the importance of China on the world economy cannot be overemphasized. With the sustainable development of the Chinese economy and the increasing promotion of the status of China in the world, particularly the China’s access to the World Trade Organization, the successful hosting of the 2008 Olympics in Beijing and the World Expo 2010 in Shanghai, it is imperative to understand the Chinese language owing to its important role in business and trading. There is therefore a need for people to understand Chinese culture, economy, politics, and the lives of 1.3 billion Chinese people. Furthermore, the rapid growth of the Chinese economy has entailed greater demand for primary commodities like copper. Coupled with this, the demand for manufactured goods from China has increased in a number of countries including Zambia.
If you invest in either of these, you are not promised all of your investment back, though of course you expect to make a return. A debt investor ordinarily expects the full return of their investment, but viewed from a corporate restructuring perspective this is not assured. I will come back to this. Investment in debt and equity can be managed on a collective basis, as asset management. You may remember the Woody Allen quote that a stockbroker is someone “who invests your money until it’s all gone”. Cruel I know, but it illustrates the difference between deposits, debt and equity. Turning back to banks, they have deposits, debt and equity on the liabilities side of their balance sheet. The problems of the pre-crisis period in this area of bank liabilities can be summarised quite easily: they had too little equity to absorb losses, and particularly so given the major expansion of balance sheets (more leverage of the equity); they had issued forms of hybrid debt-equity that were supposed to absorb losses after equity but could only do so if the bank became formally insolvent, something that could not be allowed to happen in view of the threat to the financial system; they had taken on a very large increase in short-term wholesale market funding which was assumed by the providers to have the characteristics of  BIS central bankers’ speeches  1  deposits. Moreover, short-term wholesale funding was footloose, more so than retail deposit funding. What have we done to deal with these problems?

It is important, for example, to ensure that the budgeting margins are in fact handled so they can be used as intended. Notable progress has unquestionably been made in this field in recent years. This may be a problem in the ongoing discussion, which often seems to assume that consolidation is something that happens almost by itself. I do not believe that is so. The reason why everything has gone so well just in recent years seems to me to be that the crisis in the early 1990s is still in everyone’s minds and therefore makes a firm policy easier. Moreover, growth as well as inflation have been unexpectedly favourable for three to four years and this has consolidated budgets much sooner than had been foreseen. Looking ahead, the challenges are considerable. If the quality of publicly financed services such as school education and the health service is to be maintained at an acceptable level in the longer run, this will be rather costly. That is because productivity in activities of this type, be they produced publicly or privately, will not rise as quickly as in the production of goods. Moreover, Sweden has an ageing population. Together with any difficulties in sticking to a tax level that is internationally high, this would severely test the public finances.
Effective risk management is increasingly important for participants in China's capital markets, especially with the rising participation of foreign investors. The current volatile market environment presents a challenging backdrop for investors of RMB assets, with broadly synchronised monetary tightening across advanced and emerging economies, a slower-than-expected economic recovery in China, relative currency weakness, and negative yield spread with US rates. Notwithstanding the above, enhancements to connectivity between Mainland and international markets continued, particularly in the area of risk management. For example, the Hong Kong Exchanges and Clearing Limited (HKEX) launched the MSCI China A 50 Connect Index Futures in October 2021, which provides investors with a new and effective risk management tool to manage their A-share exposures. In May 2023, Swap Connect was launched, expanding mutual market access between Hong Kong and the Mainland into the derivatives space, allowing RMB bond investors to conveniently access the more liquid onshore interest rate swap market to manage related interest rate risks, rather than relying on offshore non-deliverable interest rate swaps. These initiatives have been welcomed by the market and are conducive to  1/3  BIS - Central bankers' speeches  closer connectivity between the onshore markets and international investors, and ultimately benefit the high-quality development of onshore financial markets. Moving on to another key focus for the next stage of China's opening up: its green finance market. To achieve its dual-carbon strategies, it's estimated that over RMB100 trillion will need to be directed towards carbon reduction, which presents significant climate finance opportunities for foreign investors.

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We stabilised interest rates and verbally supported a strong koruna. In a speech at Masaryk University in November 2022, I presented the conditions under which our koruna would be strong again (Michl, 2022). Although we did not raise the CNB's repo rate further to more than 7%, we managed to have a record-strong currency. The average monthly exchange rate of the koruna to the euro was the strongest ever in April 2023, reaching CZK 23.44 to the euro (for comparison, it was CZK 23.55 to the euro in July 2008). I will always be proud if we have a strong koruna during my mandate. In 2023 Q1, the strongest-ever koruna together with the highest interest rates since 1999 created the tightest monetary conditions in more than twenty years (a more detailed analysis is available in our blog post published on the CNB website today, see Adam and Michl, 2023). The strong exchange rate made imports cheaper and tightened monetary conditions also for exporters. The large ones in particular had not been influenced by our monetary policy too much until then, since they were taking out loans in euros. 1/7  BIS - Central bankers' speeches  I estimated that inflation should be below 10% in annual terms within three months. The disadvantage of measuring inflation using year-on-year changes is that prices are compared to those observed a long time ago. If we want to know current developments in inflation, we should analyse the inflation momentum.

While they lasted these regimes provided a degree of nominal exchange rate stability which no doubt helped the internationally exposed sectors of the economy. But the price ultimately was substantially increased instability in the economy as a whole. 3  BIS Review 54/1999  Of course, some commentators have argued that the problem we had within the ERM was the exchange rate at which we entered rather than the form of the arrangements. I am not convinced. The divergence between our domestic policy needs and those in Germany was such that it seems unlikely to me that any plausible difference in the exchange rate initially chosen for the peg would have made very much difference. But in any event the range of uncertainty surrounding the choice of a sustainable peg is an important part of the problem with any pegged or fixed rate regime. The UK has not recently experienced a fully fixed exchange rate regime – although we remain a potential member of European Monetary Union. But the basic economic pros and cons of a fixed rate regime are somewhat similar. Essentially the very real advantages are nominal exchange rate certainty within the Euro-zone – which accounts for some 50% of our external trade as well as participation of the domestic economy in broader, more liquid, pan-European financial markets.
Jean-Claude Trichet: Interview in Handelsblatt Interview with Mr Jean-Claude Trichet, President of the European Central Bank, in Handelsblatt, Germany, conducted by Ms Marietta Kurm-Engels and Mr Andreas Hoffbauer on 12 May and published on 14 May 2010. *  *  *  Handelsblatt (HB): Mr Trichet, you intend to withdraw all of the liquidity that you are currently injecting into the markets via the purchase of government bonds. Do we have to face inflation in the euro area? Trichet: No, not at all. Price stability is our primary mandate and over the past 11½ years we fulfilled our mandate successfully. We have not changed our monetary policy stance. The additional liquidity that we are providing through the purchase of government bonds will be withdrawn again. Interest-bearing time deposits are an appropriate way to withdraw this liquidity. HB: What induced you to take this extraordinary step on Monday morning? You had made no mention whatsoever thereof at the press conference just three days earlier. Trichet: On Thursday afternoon and Friday, we were facing a situation that we regarded as fundamentally abnormal. That situation deteriorated abruptly, sharply and extensively. The very moment where the agreement was reached in Europe to provide Greece with financial support and the imminent decision of the International Monetary Fund (IMF) to approve the Greek standby should have contributed on the contrary to ease tensions in the markets … HB: … which was not the case? Trichet: No, the contrary happened.

The less optimistic scenario — the U Some observers see a risk of the upturn occurring more slowly than the V scenario assumes. They see a path that instead resembles a capital U, with a downturn that is more protracted. Investment has been a strong factor behind the upward phase in recent years and proponents of the U scenario consider the economy has been hit by excessive investment, so that an unduly large capital stock must now be adjusted. This adjustment is accentuating the economic slowdown, making this more difficult to counter than seemed likely earlier. It will take time — perhaps a long time — for the interest rate cuts to have an effect on demand from households and firms. Moreover, the conditions for a quick recovery have been worsened by the imbalances that have accumulated in the economy. This scenario envisages that the U.S. labour market is still so overheated that if IT prices fall while commodity prices rise, at the same time as a weaker dollar adds  2  BIS Review 20/2001  to the cost of imports, then inflation will move up even though growth is weak. The Federal Reserve might have more difficulty in handling this scenario because if inflation is threatening to rise, the interest rate would be less available for turning activity upwards. There is also the possibility of the promised tax cuts taking time to materialise, which would be liable to postpone a recovery.
A priority will be given to those projects that will contribute to the well-being of future generations. We are interested in the development of green finance instruments. However, it is also vital to assess the actual risk level for investors. We are well aware of the fact that a lot of Russian companies are highly carbon-intensive. Therefore, it is necessary to assess their risks taking into account, among other factors, the introduction of carbon taxes in the European Union and other countries. Global investors are already altering their strategies. Moreover, banks themselves need to factor in climate risks in their operations. This is a serious challenge to the economy, the financial system, and the regulator. We should learn how to adequately assess not the risks that have been accumulated before. We are differentiating risk assessment in regulation relying on actual data showing how these risks materialised. We should assess future risks and model these future risks, building these stress scenarios. In our opinion, we may not blindly lower the requirements for these green instruments, but we should develop an approach helping an investor understand that a particular project is really a green one and assess the level of its sustainability and risks that may arise, as well as how they differ from those inherent in socalled non-green projects. This is an issue to be addressed in the course of our joint work. We have already made a certain progress towards better information transparency.

In other words, the limit of the entire banking sector’s capability to provide lending to the economy has increased by this amount — ten trillion rubles. Banks thus have opportunities for a further expansion of lending, which is critical at the stage of economic recovery. I will now speak about challenges in the near future and in the longer run. Essentially, all challenges for the banking system are not new, but the pandemic, in our opinion, has accelerated the time when we should give an adequate response to them. As we have discussed it earlier in the course of our multiple meetings, intensified competition — and, moreover, intensified competition coupled with low interest rates — is a drag on bank margins, with many banks doubting business models that existed before this situation. In 2020, bank margins declined only slightly, specifically by 20 basis points, according to our assessments, i.e. remained approximately the same as before the crisis. However, this decrease may be more significant further on due to the factors of tighter competition and new business development models implemented both by large banks and because of rather low interest rates. Actually, we have discussed the topic of business models that could be sustainable in the long run in the course of our multiple meetings. To earn money, it is essential to continuously enhance services, technologies, and products. Banks may also improve their efficiency and competitiveness through banks’ consolidation, although there are very few such examples at the moment.
Gent Sejko: Supervisory policies after the start of the Banking Union – initial experiences and outlook for CESEE economies Intervention by Mr Gent Sejko, Governor of the Bank of Albania, in 6th ECB Conference on CESEE: “CESEE, old and new policy challenges”, session’s topic “Supervisory policies after the start of the Banking Union – initial experiences and outlook for CESEE economies”, Frankfurt am Main, 10 June 2015. *  *  *  Dear participants: I am honored and pleased to be in this important conference among distinguished professionals of banking and financial industry! I want to start by thanking the organizers for the invitation to be here, but also to congratulate the ECB on its new building: I wish it is as functional, as it is beautiful! Coming from the banking industry, I have been feeling the impact on the banking activity arising from the changing economic and financial environment due to recent global financial crisis. Since my appointment as the new Governor of the Bank of Albania at the beginning of this year, I have been seriously estimating the challenges we face in order to maintain the stability of our banking sector and ensure that it is fit to play its role in support of Albania’s economic growth. In my intervention today, I would like to share with you how we see the impact of changes in the financial landscape, including those in supervision superstructure, on the financial system of CESEE countries and more specifically on Albania’s one.

Furthermore, we consider important to ensure that macro-prudential policies undertaken in the Euro-area, and banking group solutions originating from the EU, should take into account the relevant impact on non-EU host countries financial stability where systemically important EU bank subsidiaries operate. This could be bridged also by an effective exchange of information in the supervisory colleges, in accordance with the new EU directive for the recovery and resolution of banks, and particularly by working to remove barriers for non-EU host countries to come closer to the European forums and be able to participate and exchange their views. Despite some negative externalities that could be temporary, in the Bank of Albania we do believe that the Banking Union/Single Supervisory Mechanism and the new role provided to ECB, will also serve to improve the supervision of the banking sector in our country. This will come not only by much more consistent approach in supervision practices, but also through improving the coordination framework between home and host supervisors. In this regard, in the Bank of Albania, we are willing and hopeful that we can establish a much stronger working relationship with the ECB. Thank you very much for your attention!