samchain/econo-pairs-v1 huggingface dataset:
Actually, about a third of the PRA’s authorised firms are in run-off. But that is in part a testament to the successful regulatory regime that the UK has been running for the insurance sector. And, whatever the regime, we cannot be certain this will be the case in every conceivable circumstance. For this reason, the PRA continues to place the resolution arrangements for insurers on both the domestic and international agendas. The banking crisis further taught us all that we need to be looking at potential storms ahead and not to be misled by periods of fair weather. For the PRA this means it will assess firms not just against current risks, but also against those that could plausibly arise in the future, carrying out increased business model analysis. For insurers, this involves monitoring emerging risks and taking preparatory steps to deal with what may result, with firms holding capital commensurate to their evolving risk profile. This approach is embedded as part of Solvency II, for example with the requirement for each undertaking to conduct a forward looking assessment of its own risk and solvency needs. The fallout from the global financial crisis has accentuated the need for an open, two-way dialogue between regulator and regulated. This is especially true in times of change or stress. To ensure policyholder protection, regulators need to be alert to emerging risks and this is best achieved through a “cards on the table” approach.

This is because insurance forms one of the foundations to our daily lives, providing a risk transfer role for all facets of human activity. Risk transfer allows society as we know it to function effectively and as such, insurers oil the wheels for the engine of the economy to function. On the basis of what I have seen since last August, the UK insurance industry is one of the most advanced and successful in the world. The key to meeting the challenges of tomorrow’s world is for the industry and regulator to continue to develop and work together. 6  BIS central bankers’ speeches
In particular, the crisis has already generated an increase in the level of indebtedness of many firms. Thus, it would make sense to assess the possibility of actions to support firms that do not involve an increase in financial obligations, such as, for example, by means of direct assistance or, in some cases through temporary capital injections. 3  Furthermore, for companies that have difficulty meeting their financial obligations, streamlined debt restructuring procedures need to be available to avoid such difficulties leading to the disappearance of heavily indebted firms whose business model is nonetheless viable. And, in parallel, for firms with non-viable business models, an orderly market exit should be available, since this would result in a more efficient allocation of resources. Apart from these short-term actions, an ambitious structural reform agenda is urgently needed, to increase the economy’s potential growth, which was already low before this crisis. And this is also true for European policies. In this case, for example, it is crucial that the European fund be converted into a permanent, common fiscal stabilisation instrument for the euro area. This would allow a joint fiscal response to macroeconomic shocks and provide a larger supply of safe European assets, facilitating the general functioning of financial markets and the specific conduct of monetary policy. Completing the Banking Union is also a priority, with the approval of a fully pooled European Deposit Guarantee Scheme. Further, we must move towards lowering the barriers to a genuine Capital Markets Union.

Here the Stability and Growth Pact lays down clear constraints on budget policy: the countries are to strive for budgetary positions close to balance or in surplus in the medium term and under normal circumstances they are to prevent the budget deficit from exceeding 3 per cent of GDP. A process has been set up for supporting the forces in each country that back a responsible policy. The process gets its muscle from the ultimate possibility of applying sanctions to countries that do not follow the guidelines. BIS Review 9/1999  –2–  The background to the EU countries’ agreement on strict guidelines in this field is the concern about the size of government debt and the central role of fiscal policy in relation to monetary policy. Fiscal policy affects price stability both via the level of economic activity and via expectations of future inflation. Without the support of generally consolidated fiscal policies in the euro area, the task of achieving price stability would be a heavy one. Problems and shortcomings in fiscal policy hit growth and employment in that they necessitate a level of interest rates that is higher than otherwise. Today, far too few countries fulfil the medium-term fiscal policy objectives and the major euro countries have very small margins to the Pact’s definition of an excessive deficit. This can lead to problems in the Union, particularly if a weaker economic development were to result in further budgetary deterioration.
Both are likely to have day to day information which is relevant in a crisis, and both will also have control of tools which can be used to handle the problem. At the same time, the number of participants would probably need to be smaller than in a regulatory college if these group are to be effective. To remain focused, the core group might perhaps need to be limited to authorities from two or three countries each, rather than wider groups. And selectivity, flexibility and pragmatism would be absolutely key. I am not advocating, for example, that we form a group for every firm that includes all authorities in every jurisdiction where that firm has a presence. Instead, that we use a risk-based approach to concentrate on those authorities with a mutual interest, identify the specific firms and capital markets that that mutual interest might cover, and bring together those relevant authorities to discuss those firms and the capital markets they interact in. Indeed, some countries’ authorities have already met bilaterally or in small groups to discuss crisis management topics of particular mutual interest. There are a number of practical aspects of crisis management that these interest groups could enhance. First, co-ordination in a crisis. This, alongside information-sharing, is the area that has received most generic attention at the cross-border level.

One which particularly exercises me is ensuring that we should always have the option of closing down a large firm in an orderly way, even if we need to use emergency liquidity assistance as a bridging loan to do so (rather than as a step towards keeping the firm open). Looking further ahead, it is clear that these interest groups should not remain inward-looking. In order for any preparations for crisis to be relevant, authorities will need to ensure that they are informed by firms’ plans and views – for example on their likely own actions in crisis, where they see their vulnerabilities in managing a problem, what they expect the authorities to do, and where arrangements could be improved. So the ongoing dialogue that the relevant authorities have with firms may well inform, and be informed by, the work of interest groups. What role could the FSF play in promoting these kinds of bilateral or small multilateral discussions and exercises on practical topics regarding specific firms and markets? As we all know, it is not the role of the FSF to manage cross-border crises. But my view is that the FSF does have a role in this area. To me it seems the ideal group to draw out the common messages and lessons that may emerge from these interest group discussions, and to establish a common framework for handling crises which will be of use both to its members and more widely. 4  4  http://www.bis.org/press/p021210.htm  BIS Review 112/2006
Thomas Jordan: Review of the Swiss economy and global economic outlook Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 13 December 2012. *  *  *  The Swiss National Bank (SNB) is leaving the minimum exchange rate of CHF 1.20 per euro unchanged. The Swiss franc is still high. An appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy. Consequently, the SNB will continue to enforce the minimum exchange rate with the utmost determination. It is prepared to buy foreign currency in unlimited quantities for this purpose. In addition, the SNB is leaving the target range for the three-month Libor at 0.0–0.25%. If necessary, it stands ready to take further measures at any time. Essentially, the SNB’s conditional inflation forecast is unchanged from its September forecast. In the short term, price movements will again be subdued by a somewhat weaker economy in the euro area. In addition, the impact which past appreciation of the Swiss franc is having on the price level is rather stronger than had originally been expected. From mid-2013 onwards, the path of the new conditional inflation forecast is almost identical to that of September. The forecast is based on an unchanged three-month Libor of 0.0% over the next three years. Given this assumption, the Swiss franc weakens over the forecast period. Nevertheless, forecast inflation remains low for the next few years.

So if the incentives to invest in new physical capital have been depressed since the Great Recession, by things like higher rise premia or problems in the banking system, perhaps the same applies to investment in human capital. It’s also possible the relative supply of low-skilled labour has risen. We know, for example, that migration flows have risen significantly over the past fifteen years, and that immigrants are more likely to take low-skilled jobs than UK-born workers (see, for example, the Report of the Migration Advisory Committee (2014)). So if easier immigration has made the overall supply of labour more responsive to economic conditions in this country – if, as if often argued, it’s flattened the Phillips curve (Bean (2006), Bentolila (2008)) – it’s probably done so to a greater extent for low-skilled than high-skilled workers. So when the UK economy grows faster than its neighbours, as has been the case over the past couple of years, you’d expect to see greater inward migration and a disproportionate rise in the supply of low-skilled labour in particular. I came across a possible example of this on a recent Agency visit. The head of a small business told me his firm had been looking to hire an accountant. They’d originally wanted someone very experienced who might in time fill the shoes of the finance director. However, they soon realised that the only way they could get someone like that was to bid them from an existing job within the UK – apparently a costly and lengthy process.
21.10.2020  Opening remarks XIX Germán Bernácer Prize Ceremony at the Banco de España Pablo Hernández de Cos Governor  Ladies and Gentlemen, It is a great pleasure for me to welcome you all, and to introduce this Award Ceremony for the 19th Germán Bernácer Prize. I would like to start by thanking Luis de Guindos, Vice-President of the European Central Bank and Chairman of the Selection Committee of this award, for his contribution to this initiative. Luis, we are greatly honoured by your presence at this ceremony. Let me also thank The Observatory of the European Central Bank – chaired by Guillermo de la Dehesa – and the sponsors, represented here by Luis Isasi, President of Banco Santander España. As you know, the prize is named after Germán Bernácer, a prominent Spanish macroeconomist with deep knowledge of monetary theory, who became Head of the Servicio de Estudios of the Banco de España in 1930. The Bernácer prize recognises outstanding scientific research by young economists under 40 from the euro zone, and our institution has been a strong supporter of this award since its inception in 2001. On this occasion, I am glad to congratulate the winner of the 19th Prize edition, Mr. Loukas Karabarbounis. He is a Professor of Economics at the University of Minnesota, a Consultant at the Federal Reserve Bank of Minneapolis and a Research Associate at the National Bureau of Economic Research.

24  As President Draghi recently noted, “In other political unions, cohesion is maintained through a strong common identity, but often also through permanent fiscal transfers between richer and poorer regions that even out incomes ex post. In the euro area, such one-way transfers between countries are not foreseen…”  BIS central bankers’ speeches  9  Chart 1:  Chart 2:  House prices(a) rose significantly during the boom years across euro area periphery countries and in the UK  UK private sector swung sharply into surplus when the crisis hit but now back close to balance…  (a) Nominal house price indices. Source: OECD. Source: Eurostat (ESA 95 definitions). Chart 3:  Chart 4:  … while Irish private sector surplus endures  Aggregate euro area debt has not fallen relative to GDP since 2007  Non-financial private sector General government  30  Other (incl rest of world)  20 10  Net saving  Per cent of GDP  0  -20 -30 2002  2004  2006  2008  2010  2012  Source: Eurostat (ESA 95 definitions). 10  -40  Net borrowing  -10  Source: Buttiglione, L, Lane, P, Reichlin, L and Reinhart, V (2014) “Deleveraging, what deleveraging?”, Geneva Reports on the World Economy, 16, Centre for Economic Policy Research.
To encourage the incorporation of climate risks into risk management, both the Single Supervisory Mechanism and the Banco de España, within their supervisory remit, have recently published supervisory expectations relating to proper risk measurement and management. Naturally, as supervisors and central banks we should consider these risks in our analyses, whether in our work as macroprudential supervisors or in economic forecasting. As in the case of the banking sector, the inclusion of these impacts in our analyses does not only pose no problem whatsoever, beyond the methodological challenges, but is also patently necessary. For instance, in our work we clearly cannot ignore the changes posed by the transition law, given that they will have most considerable – even systemic – effects on certain sectors of activity. In fact, we are collaborating with the Ministry for Ecological Transition in assessing this impact on sectors and the economy. Lastly, it would be remiss of me not to mention in this forum the role of investors. The creation and subsequent development of green bonds, aside from official initiatives and, essentially, in response to private investor demand, shows the growing interest for responsible investment. A brief look at the press will prove that this is a consolidated trend. In sum, the financial sphere, including both the banking sector and investors, supervisors and central banks, is committed to achieving sustainability goals; but, as is known, transparency and information must be enhanced in order to continue moving forward.

Clearly, just as business solvency cannot be analysed without reliable and uniform accounting information, the risk of environmental activity cannot be evaluated in the absence of comparable information. Allow me to conclude by stressing the importance of us all making every effort to row in the same direction so as to achieve an ambitious goal such as decarbonisation. Events like today demonstrate the resolve and commitment of all those involved with this challenge. We must act realistically, mindful of the limitations, but also with sufficient ambition to overcome the difficulties we will have to face. I wish you all a very productive session. 2/3  BIS central bankers' speeches  Thank you. 3/3  BIS central bankers' speeches
Further improvement of our statistics, bringing it closer to the EU requirements, remains one of the key priorities of the central bank. Just to summarize, in view of the global environment, the current macroeconomic performances of the Macedonian economy are relatively favorable. Anyway, just like in the previous years, the risks are still present and they are related to the expected recovery of the external demand, the sentiment on the global financial markets and the world prices development. Continuation with the structural reforms is a key in eliminating structural bottlenecks and paving a way for sustainable growth and faster EU integration process. The NBRM will continue with regular monitoring and analysis of the developments in the economy and remain prepared, if necessary, to undertake appropriate measures to preserve macroeconomic stability. BIS central bankers’ speeches  3

BIS Review 20/2009  1  What we know is that all these movements were caused by principal uncertainty among the commercial banks worrying about their solvency and financial stability. The banks were not sure among themselves about to what extent they were hit by the collapse of the market with asset-backed securities and consequently about their counterparts’ ability to stay in the business over a longer period than one day. Central banks reacted and extended the money market operations in order to narrow spreads between the market rates and key policy rates. For instance, the Czech National Bank introduced a new liquidity providing repo operation despite the fact that the money market as a whole operates with huge surplus and on average the Czech National Bank has to withdraw roughly 400 billions Czech crowns from the money market to be able to control the market interest rates. While introduction of this new operation made the money market participants less nervous, unusual spread between the market rates and the key policy rate still persists. This is not only the case of the Czech economy or other Central European economies but we observe the same also in the eurozone.
14 Most government authorities in democratic countries have solved this problem by delegating interest rate setting to an independent central bank. But how can the conduct of monetary policy, which has such far-reaching consequences for so many, be delegated in a democratic country? How is one to ensure that decisions are in line with the interests of society? These questions become more relevant, the more room there is for judgement in interest rate setting. When the operational objective was a fixed exchange rate, the room for judgment was very limited. Norges Bank’s task was to maintain a fixed krone exchange rate. Monetary policy was more or less on “autopilot”. In a narrow sense, this was a very open policy. The public could at all times observe the krone exchange rate and monitor that the Bank was performing its duty. Many of you perhaps remember the era when a dollar cost 7 kroner and 14 øre. 15 On the basis of purely democratic considerations, there was little need for transparency about the assessments underlying the use of instruments. The exchange rate was fixed, but occasionally the target value was adjusted. At those times the cards were held close to the breast. On occasion it was even necessary to break the eighth commandment (that is to lie). Around the end of 1986, journalists in the newspaper Nordlys were asked to take a retrospective look at the past year. One of them recalled an interview with the state secretary of the Ministry of Finance, Bjørn Skogstad Aamo.

Earlier we asked ourselves: Are there any particular reasons to release this information? Now we ask ourselves whether there are any particular reasons not to be open. The Duisenberg principle is a practice guideline for us. Some studies show that transparency about the monetary policy target helps anchor inflation expectations. 25 The more credible monetary policy is, the more effective the interest rate will be in stabilising output and employment. 26 Transparency provides good incentives. When we publish our analyses, we tend to make an even greater effort to ensure the quality of the analysis. Open external communication also  23  See for example Michael Woodford (2005): “Central-Bank Communication and Policy Effectiveness”, in The Greenspan Era: Lessons for the Future, Federal Reserve Bank of Kansas City, pp. 399-474. 24  Willem F. Duisenberg (2001): “The ECB's monetary policy strategy and the quantitative definition of price stability”, Letter of Dr. W. F. Duisenberg, President of the ECB to the Chairperson of the Committee on Economic and Monetary Affairs, 13 December 2001. 25  See for example Georgios Chortareas, David Stasavage and Gabriel Sterne (2002): “Monetary Policy Transparency, Inflation and the Sacrifice Ratio” in International Journal of Finance & Economics, 7, pp.141155, and Nergiz Dincer and Barry Eichengreen (2009): “Central bank transparency: causes, consequences and updates”, NBER Working Paper 14791. 26  Openness about how the interest rate is set also seems to generate less volatility in financial markets at the time of monetary policy meetings, resulting in more stable market rates.
Consistent with the more traditional banking models in this region, there are now increasing calls for a return to basic banking and its clear separation from higher risk-taking activities. This is part of the broader efforts to create a safer global financial system where markets and institutions are more transparent, less complex, and less leveraged than they are today. While the banking sector in ASEAN has not reached the degree of complexity observed in the advanced economies, the region has to be mindful of the consequences as financial institutions evolve to become increasingly regional in orientation. Indeed, such growth must be commensurate with the capacity and capability of both the financial institutions and the regulators to manage and oversee the associated risks. Strengthened supervisory intensity and effectiveness, a core component of the financial sector reforms, is an essential pillar to check against unfettered innovation and risk-taking behaviours and promote strong incentives for prudent risk management. ASEAN will have to pursue an outcome that facilitates innovation and efficiency, without resulting in undue risks and unwanted costs on both the financial system and the overall economy. Second, is the stronger focus on more responsible and sustainable financial business practices. Following the recent global financial crisis, there is a stronger international emphasis for appropriate risk-aligned mechanisms, particularly on compensation frameworks, which provide incentives for financial innovation and growth, while not compromising financial stability.

We should be the ones to be thankful to you. Finally, let me express a special “thank you” to the teachers here for making this event happen, and for the wonderful guidance and support you have given to your students. Let me also add a “thank you” to some people who are not here, who are your families, for the support they must have given to you to be able to reach such an achievement today. You are very lucky to be so well taught – even if you might not have realised it; or even if your teachers might not be aware of how much good they have given to you; or even if your families are not aware of how much good they do to their children. It just comes with being a father or a mother. So again, let me congratulate you and congratulate everyone who has been involved in your success. Let’s now open our discussion. Thank you. 2/2  BIS central bankers' speeches