samchain/econo-pairs-v1 huggingface dataset:
On such markets, central government therefore usually applies regulations, such as those concerning the electricity network, for example, or actively runs the system, such as for the rail network, for example. Another characteristic of the payment market is the existence of positive network externalities. This means that when new users join a system, the utility increases for all participants, even those already in the system. Another example of a product with positive network effects is the telephone: the utility of having a telephone increases as more people join the telephone network, allowing you to call them. This means that coordinating different players on the market may lead to economic gains for society. Since utility increases with the number of users this means that the market has a tendency to eventually end up being dominated by a monopoly that takes over (a situation of natural monopoly, just as with economies of scale). The combination of economies of scale and network effects thus creates tendencies towards heavy concentration. Monopolies that maximise their returns will give rise to efficiency losses in the economy in general. 16 All in all, this suggests that it may be justifiable for central government to undertake the task of regulating the market, to reduce the power of monopolies, and as coordinator, to ensure that network externalities are internalised, which is exactly how it works in Sweden today. We can thus observe that, as money provides the necessary lubrication for all economic activity, efficient and secure forms of money are important for economic growth.

In the United States and United Kingdom, it happened that banknotes issued by private banks were traded at a lower value than was printed on them. The advantage of government issue is that government banknotes are usually considered to be completely safe. This is the main reason why the government, via the central bank, is granted a monopoly on issuing banknotes. Quite simply, it has turned out to be easier for central banks, which are run in the national interest, by what is also best for society in the long term, to build the required confidence than it is for private companies that have profit motives. Substantial costs arise if confidence in the value of money disappears Right up until modern times, the value of banknotes and coins was linked to the value of a precious metal, such as silver or gold. But this link could be problematic as it meant that the supply of money was determined by access to precious metals and not by activity in the economy. 7 When production increased at the same time as the money supply was fixed, deflationary pressures arose. The bestknown example of this is the depression of the 1930s, when the restrictions under the gold standard led to serious deflation. Research has revealed the existence of a relationship between how quickly a land chose to abandon the gold standard and how quickly its economy started to recover.
It is against this backdrop that policymakers internationally have engaged in a deep and wide rethink, rewrite and reform of the global regulatory rules of the game. Wide, reflecting the multi-faceted nature of the problems, market failures and market frictions exposed within the financial system during the crisis. Deep, reflecting the severity of the hit to balance sheets, risk appetite and economic activity that the crisis has inflicted and continues to inflict. The next section reviews these regulatory reform efforts and their impact on bank balance sheets and market metrics of banking risk. With a number of reforms yet to be fully enacted, it is too soon to be reaching definitive conclusions. Nonetheless, some of the key questions thrown up by these regulatory reforms conceptual, empirical and practical - are now reasonably clear. We also have almost a decade’s worth of additional evidence and research on which to draw when assessing these issues. The following sections discuss some of those issues, drawing on new research and evidence: the calibration of regulatory standards, balancing the costs and benefits of tighter regulation; the overall system of financial regulation, balancing underlaps and overlaps, simplicity and complexity, discretion and rules; the impact of reforms on incentives in the financial system, in particular incentives to avoid regulation; and the evolving role of macroprudential regulation in safeguarding stability of the financial system. The financial system is dynamic and adaptive. So any financial regulatory regime will itself need to be adaptive if it is to contain risk within this system.

As I hope you have gathered by now, we do not like surprises, and I suspect firms do not like them either. I hope our draft statement today delivers on our side of that arrangement. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  A safe descent down the mountain I want to turn now to what the Supervisory Statement euphemistically refers to as ‘exit’ – what happens if a bank cannot achieve its business objectives and finds itself on course for a route down the mountain rather than up. Our approach to competition necessarily implies that firms must be able to both enter and exit the banking market. And, whilst our aim is to work constructively with firms to find a path to success, authorising more new banks inevitably means managing more banks’ exits. This is not surprising: such banks tend to operate in highly competitive markets and often have novel (untested) business plans. Indeed we have already seen examples of this – three UK start up banks authorised since the launch of the New Banks Start up Unit in 2016 have decided to give up their banking licence9 before exiting the mobilisation phase. And over the past few years several other firms have chosen to wind themselves down and done so successfully.
In addition, the authorities should look into the possibility of supplementing the complex regulations with simpler and more robust indicators such as, for instance, more effective concentration limits and an upper limit for the indebtedness ratio. BIS Review 30/2008  1

The narrow monetary aggregate M1 remained the main contributor to broad money growth. The growth of loans to the private sector strengthened further, continuing the upward trend observed since the beginning of 2014. The annual growth rate of loans to non-financial corporations rose to 4.3% in September 2018, from 4.1% in August, while the annual growth rate of loans to households stood at 3.1%, unchanged from the previous month. The euro area bank lending survey for the third quarter of 2018 indicates that loan growth continues to be supported by increasing demand across all loan categories and favorable bank lending conditions for loans to enterprises and loans for house purchase. The pass-through of the monetary policy measures put in place since June 2014 continues to significantly support borrowing conditions for firms and households, access to financing – in particular for small and medium-sized enterprises – and credit flows across the euro area. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. In order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer-term growth potential and reducing vulnerabilities.
Furthermore, the work conducted by the EOFS does not replace the oversight by the national central banks. They still need to oversee the banks as a part of their mandate on financial stability. 4  BIS Review 96/2006  The creation of an EOFS could, if the organization is successful, be seen as the embryo to a fullfledged European supervisor – a future European FSA. It is much too early to tell whether such a development is feasible. First the EOFS would have to prove that it can produce added-value in terms of information gathering and assessments with real supervisory resources beyond that of a talk shop. To be honest, my approach is not without problems either. It would make the regulatory structure somewhat more complex and it would increase the regulatory burden on the cross-border banks by adding a new agency for reporting. However, in my view, we need to achieve a greater coordination of the information gathering and assessments. Sometimes you need to settle for the second-best solution when the first-best is not possible. Given the problems that I have sketched, a natural question is why my proposed solution has a purely European focus. The growth of cross-border banking is not unique to Europe, even if the development of truly cross-border banks is accelerating fast in Europe – perhaps faster than in other regions. The reason for my European focus is that there is, within the EU, a common regulatory framework, which includes the establishment of joint organizations.

Second, in countries where formal wage indexation has declined sharply during the crisis, the pass-through of headline inflation to wages may have weakened. Third, that pass-through also depends in part on labour market slack, since in an environment of high unemployment trade unions may be prepared to prioritise job security over some loss in real wages. In short, for the time being there are grounds for being cautious when assessing the durability of the inflation outlook. For us to be confident that inflation will indeed stabilise around our aim, we would need to see clear evidence that underutilised resources are declining and feeding through more convincingly into domestic price formation. For that, it is clear that continued support for demand remains key. And this provides the answer to the third criterion: we are not yet at a stage when inflation dynamics can be self-sustaining without monetary policy support. The recovery of inflation still depends on the very favourable financing conditions that firms and households enjoy, which in turn depends on the substantial degree of monetary policy accommodation we have in place today. Accordingly, our inflation projections still include a material contribution from monetary policy over the next two years. For this reason the Governing Council at its last meeting confirmed the appropriateness of the current very accommodative monetary policy stance. The monetary policy stance is still appropriate Yet it is important to understand that our stance is no longer determined by just one tool, policy interest rates.
It is my opinion that we should run that risk only in the most dire of circumstances, and I presently do not see those circumstances obtaining. So much for forecasting and monetary policy. Let me now walk you through an overview of the Texas economy to set the stage for a broader discussion of what I believe continues to bedevil a lasting recovery and more efficient job creation in the United States. I will use some slides to illustrate key points. The National Bureau of Economic Research, the arbiter of when recessions begin and end, dates the onset of the Great Recession as December 2007. The economic performance of Texas since December 2007 can be summarized with the chart projected on the screen. It depicts employment growth in the 12 Federal Reserve districts. In the Eleventh Federal Reserve District – or the Dallas Fed’s district – 96 percent of economic production comes from the 25.7 million people of Texas. As you can see by the red line, we now have more people at work than we had before we felt the effects of the Great Recession. All told in 2011, Texas alone created 212,000 jobs.3  3  According to the National Bureau of Economic Research, the nation went into recession in December 2007 and came out in June 2009. According to the Dallas Fed’s Texas Index of Coincident Indicators, Texas went into the recession in August 2008 and came out in December 2009.

But I’ll bet you that those who constantly enumerate our deficiencies and are given to habitual Texas-bashing would give their right – or should I say, left – arms to have Texas’ record of robust long-term job creation instead of the anemic employment growth of other megastates such as California and New York. Or even the job formation record of many other countries! The following chart shows that over the past two decades, the rate of employment growth in Texas has exceeded that of the euro zone and its two anchors, Germany and France, as well as that of two natural-resource-intensive countries with populations comparable to Texas’, Canada and Australia. 4  BIS central bankers’ speeches  Now, is all this just prototypical Texas brag, or are there lessons the nation can learn from the success that is enjoyed here? Texans are hardly given to modesty, but I believe there are some undeniable lessons being imparted here. One lesson I draw from comparative state data is that monetary policy is a necessary but insufficient tonic for economic recovery. The Fed has made money cheap and abundant for the entire country. The citizens of Texas and the Eleventh Federal Reserve District operate under the same monetary policy as do our fellow Americans. We have the same mortgage rates and pay the same rates of interest on commercial and consumer loans, and our businesses borrow at the same interest rates as their brethren elsewhere in the country.
But Asian economies are in a relatively stronger position to absorb these financial shocks. Economic fundamentals in Emerging Asian economies are stronger since the taper tantrum in 2013. 2 / 11  BIS central bankers' speeches  Foreign reserves and bank capital buffers are larger while financial regulatory frameworks are more robust. And policymakers in Asia are more prepared to make macro-policy adjustments as needed, including pre-emptive interest rate hikes to support exchange rate stability. The second risk to the global economy is rising protectionism. Protectionism is rearing its ugly head on three trade fronts: US-China; US-EU; and USMexico-Canada. Thus far, the US has imposed tariffs on solar panels, washing machines, steel and aluminum imports from all major trading partners. It has announced tariffs of 25% on $ billion of imports from China, and has threatened tariffs of 10% on another $ billion of imports from China. Both China and Europe have announced retaliatory tariffs. The immediate effect of these trade restrictions is limited and does not threaten global growth … yet. The announced tariffs are estimated to shave around 0.1% point off China’s growth, with the US economy similarly impacted by China’s retaliatory measures. The real risks from the tariffs are spillover effects, escalation, and economic uncertainty —all of which could severely undermine global growth. First, spillover effects. The impact of the tariffs will be felt not only in the countries involved but across the value chains that span several countries. Second, escalation.

Maintaining financial stability and trust are central to MAS’ mission. The annual report summarises our many regulatory and supervisory initiatives – to make derivatives markets safer, to enhance cyber security, to promote a good risk culture in our financial institutions. The annual report also devotes two pages of infographics to the enforcement actions MAS has taken against those who breach our regulations or fail to meet our standards. MAS does not tolerate: abuse of our financial system for money laundering or tax evasion; misconduct or manipulation in our securities markets; or mis-selling to consumers who place their trust and money in our financial institutions and their representatives. But being a no-nonsense regulator does not stand in the way of being also businessfriendly. For financial institutions who want to grow their business in Singapore, build up the skills of their employees, or want to innovate or experiment with new technologies, MAS is a happy partner and collaborator. 1 “The Goldilocks Economy – Will the Three Bears Return?”, Speech by Mr Ravi Menon, Managing Director,  Monetary Authority of Singapore, at UBS Wealth Insights Conference, 15 January 2018. 11 / 11  BIS central bankers' speeches
As operators of public infrastructure, we have a similar role to play for payment systems. We build infrastructure, add new functionality and set standards and policies to underpin safe and efficient economic and social activity. To do so effectively, we need to listen to and collaborate with the whole industry: ensuring that public and private sector innovation is coordinated. Infrastructure is only valuable if sufficient users can access it. As a public authority, we want to encourage fair and open competition with proportionate barriers to entry. A road is only useful if a wide range of people and vehicles can drive on it. Overly restrictive access policies can be a barrier to innovation, increase tiering and lead to more expensive services for end-users. Just as we need some restrictions on roads, such as preventing heavy vehicles from using weak bridges, and ensuring vehicles have passed appropriate tests, appropriate safeguards are needed in the access criteria for payment systems. There are two key ways to make central bank money more accessible while managing risk. The first is enhancing the access policy, including clear criteria . In 2017, the Bank of England opened direct access to settlement accounts to non-bank Payment Service ProvidersOpens in a new window – half a dozen or so have already joined. In 2021, we launched an omnibus account policy offering to innovative high-value payment services, underpinned by the security of central bank money. Omnibus accounts can enable market participants to develop new payment systems, or allow existing systems to settle more securely.

Indeed, there are some estimates that currently modelled losses could be undervalued by as much as 50% if recent weather trends were to prove representative of the new normal. 18 In addition, climate change could prompt increased morbidity and mortality from disease or pandemics. Such developments have the potential to shift the balance between premiums and claims significantly, and render currently lucrative business non-viable. Absent actions to mitigate climate change, policyholders will also feel the impact as pricing adjusts and cover is withdrawn. 19 Insurers’ rational responses to physical risks can have very real consequences and pose acute public policy problems. In some extreme cases, householders in the Caribbean have found storm patterns render them unable to get private cover, prompting mortgage lending to dry up, values to collapse and neighbourhoods to become abandoned. Thankfully these cases are rare. But the recognition of the potential impact of such risks has prompted a publicly-backed scheme in the UK – Flood Re – to ensure access to affordable flood insurance for half a million homes now considered to be at the highest risk of devastating flooding. This example underlines a wider point. While the insurance industry is well placed to adapt to a changing climate in the short-term, their response could pose wider issues for society, including whether to nationalise risk. The passage of time may also reveal risks that even the most advanced models are not able to predict, such as third party liability risks.
And yet, our unity may appear threatened today: euroscepticism is on the rise, driven by populism throughout Europe; Brexit triumphed in the United Kingdom last June; and the new American government freely expresses its reservations about the European Union. In these times of turmoil, we mustn’t lower the European flag. Let us remember the formidable progress that we have made since our two countries decided to share their destinies by signing the Treaty of Rome, along with Belgium, Italy, Luxembourg and the Netherlands. Today, in Europe, we share three major economic assets: the single currency, the single market and our common social model. We have built them together and we can be proud of them. This will be my first point. For the future, European unity continues to be, in my view, the best answer to all the questions. And for that, the remarkable friendship between our two countries must continue to inspire us. As Chancellor Konrad Adenauer already stated in 1963: “Imagine, if this friendship [between France and Germany] didn’t exist, any attempt to create Europe would be doomed to fail from the outset.”1 This will be my second point. I. What we currently share in Europe: our three economic strengths. Let me start by our shared successes. Today, in Europe, we have three major economic assets: the single currency, the single market and our common social model. First asset: the euro. It is a solid currency that is recognised worldwide.

How should we react? Not by less Europe. This would be a mistake if we want to take collective control of our destiny in this new world. But by a “better” Europe, less caught up in the detail, more focused on a few key priorities, and more efficient. To achieve this, Europe needs the energy of Germany and France, and of their remarkable friendship. I will now cite Chancellor Helmut Kohl: “The Germans and French must together build the hard core of the European Union – a union that sees itself not merely as a common market, but as a community of values, a democracy based on freedom, the rule of law and the social responsibility of the State”.3 Naturally I won’t talk to you this evening about the French election debate: I will simply say that as friends of France, you must not underestimate the strength of its institutions. I will talk to you even less about the German election debate. But I strongly believe that after these democratic elections, whatever the outcome, the governments of our two countries will have to confer to decide on a number of shared bilateral projects, and above all prepare a common initiative for Europe. Because for Germany and for France, the other country is certainly the best possible partner: there is no serious alternative, neither in the east nor the west for Germany, nor in the south for France.