samchain/econo-pairs-v1 huggingface dataset:
Losses on subprime mortgages in the US shattered confidence in the entire financial system. Financial institutions started to doubt their counterparties and interbank lending came to a halt. Experience shows the need for tighter regulation of systemically important banks. This can for example be achieved by introducing higher bank capital and liquidity requirements for such banks. The capital requirement for mortgage lending should to a larger extent reflect the overall risk of such loans. 1  See Carmen M. Reinhart and Kenneth S. Rogoff (2009): “This Time Is Different. Eight Centuries of Financial Folly”, Princeton University Press. BIS Review 69/2010  9  Justified criticism has been levelled at international banks. The focus is now shifting to government fiscal management in many countries. Fiscal slippage seems to have been considerable in some European countries in particular. EU budget policy guidelines have been diluted and have not been adhered to. Countries have experimented with budget frameworks and have debt-financed public investments, which require operating and maintenance costs but yield little income. With already large deficits, the crisis has destroyed state finances in many countries. Economic developments over the next 5–10 years will be marked by the tightening measures that will now have to be implemented in these countries. However, there are exceptions. State finances in Nordic countries are in order, which provides a better starting point. With ample state coffers, the Norwegian economy was to a considerable extent insulated from the effects of the financial crisis in 2008 and 2009.

Norway has had room for manoeuvre because solid state finances secure credibility and because inflation expectations are firmly anchored. Even though oil prices fell from close to USD 150 per barrel in summer 2008 to almost USD 30 at the end of the year, Norway’s state finances were not called into question. In addition, oil prices increased markedly as early as spring last year. The oil fund mechanism curbs the effects of oil price fluctuations on demand and output – as well as on inflation and the krone exchange rate. The Government Pension Fund Global is also an important source of funding for public spending in the next decades. Reductions in government welfare spending, which will probably be a matter of necessity with an increasingly ageing population, will be smaller than would have been the case without the fund. 10  BIS Review 69/2010  5. Challenges to the Norwegian economy  In the period 1992–2008 the Norwegian economy experienced a long upturn. In the 2000s, the cost level started to rise, partly reflecting a sharp improvement in our terms of trade. Prices for Norwegian goods, such as oil, gas, metals, minerals and fish increased sharply while import prices fell. Looking ahead, the impact of these driving forces cannot be expected to be as favourable. It is hardly likely that export prices will show a renewed surge. Moreover, our economy has become vulnerable. Norwegian labour has never been as costly as today.
In such cases, it pays for the country to try to reduce its current-account deficit by restraining domestic expenditure or increasing production. Many of the euro countries that are having problems have had both current-account deficits and deficits in their public finances. Probably the most effective way of reducing the deficit in such cases is to improve competitiveness and reduce domestic expenditure at the same time. Postponing consolidation in such a situation would only entail domestic demand continuing to be higher than it should be. Figure 4 shows the current-account balance in a number of euro countries last year. 4  BIS central bankers’ speeches  Figure 4. Current-account balances Per cent of GDP, 2011 6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6  -6  -8  -8  -10  -10  Source: European Commission  Like the Riksbank, most forecasters expect a tighter fiscal policy to dampen growth in Europe in the period immediately ahead. It is difficult to assess the precise effects as these will depend on how and when the measures are implemented. But the measures will of course have an impact, particularly when several countries reduce their public spending and/or raise their taxes at the same time. This will happen, furthermore, in a situation in which there is little scope for monetary policy to further stimulate demand. But what’s the alternative?

Source: The OECD  The high costs associated with reducing indebtedness in the economy means that situations can sometimes arise in which there may be a desire to take factors such as the level of indebtedness into account in monetary policy, as well as inflation and the real economy. How often this actually happens depends on how effective the oversight and supervision of risks in the financial system as a whole are. If this so-called macroprudential supervision is less effective, it is probable that monetary policy must take such factors into account to a greater extent than otherwise.9 After having clarified this matter of principle, I will now discuss the development of household indebtedness in Sweden. In 2011, the Riksbank pointed out that a gradually rising repo rate,  9  12  Michael Woodford presents a theoretical analysis of how such factors can be incorporated into a model for inflation targeting in Woodford, Michael (2012) “Inflation Targeting and Financial Stability”, Sveriges Riksbank Economic Review, 2012:1. Sveriges riksbank. BIS central bankers’ speeches  apart from stabilising inflation and resource utilisation, may also have the positive side effect of helping to slowdown household borrowing. Credit growth in the household sector, which is closely linked to the development of the housing market, has gradually declined since 2010. Household indebtedness is still high, but it levelled off last year. This suggests that the risks in this area are limited, at least at the moment.
He would lose his contract and a different forecasting firm would be hired. In this way, the blame was externalised elegantly. It is not surprising that under such circumstances the young economist had to reassess his professional situation and to look for other fields to develop his skills. But he kept many valuable souvenirs. Don’t forget that he acquired first-hand knowledge of what a powerful giant multinational company can be, but also how fragile it can become when the growth of its organisation is not sufficiently controlled. - Incidentally, this same company is still prospering, but over the decades it has been thoroughly reorganised many times. Restructuring has become a habit. If the former young economist revisited “his” company today, he would not recognise it anymore. The complicated matrix organisation, including the central staff of economics, has disappeared. Responsibility is structured in much simpler ways. The hierarchy is considerably flatter. The game of externalising blame can no longer be played as easily as in former times. Even the quality of food and wine served at the visitors’  2  4  http://www.bls.gov/oco/ocos055.htm. BIS Review 62/2004  restaurant is more modest. One might still be offered a cigar after lunch, but the selection would most likely be narrower than in the ‘good old days’. With respect to the disappearance of economics units in business corporations, John J. Casson writes: “During the past two decades, several corporations, including IBM, Citibank, American Express and General Electric, eliminated their economists units.

There is therefore little time to spare, in the run up to a revival of the sukuk market and the lead time it takes to promulgate tax exemption rules for Islamic finance transactions; financial market players in Hong Kong must gear themselves up to embrace the change coming your way. Secondly, there is in general a greater awareness of Islamic finance within the local financial community, particularly among banks. Banks in Hong Kong are in the position of being both investors in, and suppliers of Islamic finance products. Instruments, ranging from retail  BIS Review 19/2009  3  Islamic investment funds and Islamic treasury placements at the interbank and corporate level, to Islamic loan syndication, have started to emerge in Hong Kong within the past year. Financial market participants have also set up Islamic banking windows here to signal their readiness to cater for these types of activities. But even with all the significant developments achieved here in such a short period of time, more still needs to be done. While the recognition of Islamic finance as a viable fund-raising and investment alternative is gradually making its way to the corporate sector in Hong Kong, the pace of development is still rather slow. Furthermore, this market awareness should also be promoted beyond banks and other types of financial institutions to all related service industries, such as investment managers, asset managers, securities and brokerage houses, exchanges and commodity firms, pension funds, insurance agencies, solicitors, accountants, and trustees.
The regulatory approach by CPSS-IOSCO is therefore non-prescriptive and aims to provide guidance that should help FMIs to choose the appropriate (mix of) recovery tools. This approach, however, might need to be adapted over time. Evolution of global clearing structures [slide 11] Let me now turn to the fourth known unknown, which is the optimal design of the global clearing structure. 2  See Financial Stability Board. “Consultation Paper: Feasibility Study on Approaches to Aggregate OTC Derivatives Data”, 4 February 2014. 4  BIS central bankers’ speeches  [slide 12] Such a design depends on numerous factors and questions: •  How many CCPs do we need at global level? •  How many markets should a CCP serve? •  What are the implications of competitive clearing where there are several CCPs serving the same trading venue? •  Should CCPs be linked and how? Should links be limited to cash-market CCPs or also apply to derivatives and commodities CCPs? •  What degree of tiering is optimal and how should participants get access to CCPs when needed? This question has gained in importance with the establishment of the clearing obligation. [slide 13] What we see today is a globalisation process that has triggered a trend towards global clearing with increasingly large global CCPs. Moreover, it appears that many banks prefer indirect access to clearing services so as to comply with the clearing obligation. Client clearing seems thus to be dominated by a few large global intermediaries.

From mid April onwards, the national central banks of the Acceding Countries will participate - as an observer - in meeting of ESCB Committees (in extended composition) and meetings of the General Council. Enlargement involves a number of technical efforts from the side of the ECB and the national central bank, in terms of adaptations to the infrastructure, but also creates a new dimension to economic convergence and monetary stability in the European Union. I am, however, convinced that the Eurosystem will also master this challenge, as it has done before, on occasions, which demanded even more breath-taking efforts. Ladies and gentlemen, I should now like to conclude. Again, my gratitude goes to His Excellency Carlo Ciampi and Governor Antonio Fazio. I am deeply convinced that this meeting of the Governing Council will contribute to the team-sprit of the Eurosystem and hence will be one more step in the direction of a united Europe.
But data from different decentralised sources are not structured, there is a lack of transparency in methodology, no representativeness, and no use of international standards, concepts and semantics. Hence, there is a need to streamline the wealth of information to structured, understandable, shareable and most of all, reliable data of the future. The latter is prerequisite to preclude devaluation of the data, and statistics plays a critical role in preserving the value of data. In the new era when we have open access to multiple sources of information, it is not enough official statistics to be disseminated more effectively, but it has to be accepted, understood and trusted by the general public. Good official statistics, as dramatically shown during the Covid-19 crisis, can be crucial to provide a first line of defence against misinformation (Biancotti et al., 2020)2. High quality and reliable statistics is the "weapon" against fake news and divisive messages. More than ever as policy makers we are faced with misinformation, fake news and speculations that can undermine our ability to act effectively. The digital environment, the growing role of social media and absence of clear regulatory framework propelled the dissemination of the so called "mal-information". For example, we as a central bank, faced ungrounded speculations against the exchange rate on a couple of occasions. Keeping us 24/7 alerted is the least damage that this type of irresponsible behaviour implies.

Anita Angelovska Bezhoska: Increased availability and use of official statistics in the Republic of North Macedonia Introduction speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the marking of the European Statistics Day, Skopje, 19 October 2021. *** Your Excellency Ms. Forsgren Bengtsson, Dear Mr. Simovski and Mr. Stymne, Dear State secretary Ms Gaber, Distinguished speakers, representatives of the non-government sector, colleagues and participantsFor a second year in a row, we are marking the European Statistics Day in specific circumstances, shaped by the global pandemics. The health crisis has infiltrated itself into every single pore of our societies disrupting the world we know. Statistics has not been an exception whatsoever. At the time the crisis hit, statistics area in global terms was already facing many challenges. Producers of statistics were coping with lingering tasks that came as a side effect of the global financial crisis in 2008. Although the lack of statistics was not a cause of this crisis, still it revealed significant data gaps and underlined a need of more frequent, comprehensive and granular data to strengthen policy-making infrastructure. The second challenge rested in unprecedented digitalisation and data proliferation, by both private and public entities. It challenged official statistical producers, which serve as the primary source of data, to innovate their data and data sources, but even more to work intensively on setting proper data governance frameworks.
Chart 12 Monetary policy, the global economy and inflation Impact of monetary policy Cost of imports Exchange rate  Global economy  Demand  Domestic demand  UK inflation  Expectations and credibility Pricing climate  The world I have described in this speech is one where UK inflation has been pushed up by global factors and the very substantial depreciation of sterling. And there is not much evidence that the margin of spare capacity is creating much countervailing pressure, partly because the margin is not very large, but also because the way in which prices respond to demand pressures is much more complex than the simple “output gap” model suggests. 9  14  The Bank of England databank of pay settlements shows that private sector pay settlements averaged 3.5% in the period 2005 to 2008. BIS central bankers’ speeches  In these circumstances, the case for not adjusting monetary policy rests heavily on wellanchored expectations of inflation and the credibility associated with the Bank’s inflation target remaining intact. The MPC entered the global financial crisis with a high stock of credibility reflecting the inflation performance of the previous decade. In 2007/8, we could reasonably assume that inflation expectations would remain well anchored at close to the target. And that gave the Committee freedom of manoeuvre to act with some unprecedented policy changes which have been effective in heading off the risk of deepening recession and a persistent deflation.

Going forward to a time when all this global financial crisis is resolved, it may also be appropriate to revisit and rethink the standard financial regulatory framework, particularly in emerging and even in a more developed part of the world. Given the magnitude of market adjustment, volatility and contagion across markets, risk diversification is easier said than done. This is especially true as markets and institutions seem to correlate highly in a crisis situation as risk-aversion intensified. The current financial climate, therefore, highlights the importance of supervisory coordination. This coordination should include both domestic and cross-border dimensions and encompass key regulators and central banks. This is for the benefit of information sharing and elimination of regulatory arbitrage, which has been one of the fundamental causes of this crisis. Given increasing financial integration, and growing complexity of financial instrument, market, counterparty links, and changing demarcation line between different financial institutions and financial players, we have witnessed emergence of the new channels and process of spread of systemic risk, through broader groups of players – banks, investment banks, insurance companies, and non-banks – all of whom are regulated under different framework, or not even regulated. Because of this, there is a pressing need to rethink the regulatory framework in order to be in keeping with this new paradigm. 2  BIS Review 141/2008  Ladies and Gentlemen, It has been said that this crisis will soon lead to major changes in the geopolitical world order.
And those same AI systems and processes are being used today across the financial sector to bring benefits to consumers, to firms, and to the UK financial system as a whole. AI-driven online platforms may, for example, help customers manage their money and savings more effectively, as well as make the processing of loan applications or insurance claims easier, quicker, and more transparent. Financial firms may, in turn, benefit from AI in making efficiency and productivity gains, in tailoring products to customers’ needs, and in more effective ways of combating financial crime. AI may also boost the overall efficient functioning and resilience of financial markets and the wider economy. Clearly, the world is a very different place today from the one we started this year with; and while the COVID crisis has had, and will continue to have, a profound impact on the economy, and on the households and businesses that drive it, it has also increased and focussed interest in the potential uses of AI in tackling some of the many immediate problems and challenges precipitated by the crisis. For example, many businesses, including financial firms, are looking to use AI, sometimes combined with alternative data sources, for enhancing customer engagement, for driving more automation of internal processes, and for improving virtual working environments.

Taking these in turn, data form the core of all AI models and good data management and data governance are essential in controlling issues with, for example, biases that may be embedded in the data. At the model level, we need to think about issues such as ensuring that models continue to perform under a wide range of different conditions and being able to explain the outputs of complex AI systems. Moving to the firm level, some of the key issues will revolve around risk management and governance structures; around accountability and appropriate controls. And finally, for the financial system as a whole, AI may amplify network effects such as unexpected changes in the scale and direction of market moves. In terms of the regulatory challenges, it’s clear that policy thinking in this arena is also evolving rapidly. But the existing regulatory landscape is somewhat fragmented when it comes to AI, with different pieces of regulation applying to different aspects of the AI pipeline, from data through model risk to governance. Policy must strike a balance between high-level principles and a more rules-based approach. We also need to future-proof our policy initiatives in a fast-changing field. With all that in mind, and in order to further our objective of promoting the safe adoption of AI in financial services, the Bank of England, along with the Financial Conduct Authority, is today launching the Artificial Intelligence Public-Private Forum.
Ruin is the destination to which all men rush, each pursuing his own best interest in a society that believes in the freedom of the  1  Byatt et al (2001). 2  Science News (1983). 3  Frank (2011). 4  Ridley (1993). BIS central bankers’ speeches  1  commons”.5 Therein lies the tragedy, the market failure. This situation is made more, not less, tragic by unbridled competition. The tragedy of the commons is one example of an age-old problem of military arms races. The incentives of individual players, and outcomes for society, are much the same as in commons tragedies. Individual country incentives are to increase military might, to leapfrog opponents to improve national security. But this game of leapfrog is a Red Queen Race. The quest for national safety results in a steady rise in military spending and a steady fall in both societal and national security. The common good is jeopardised. These arms-race dynamics, and commons tragedies, have a history in economics too. It is not just plumage that is conspicuous. As Thorstein Veblen set out at the end of the 19th century, so too is consumption.6 Some goods serve as a signal of social standing: they are positional. Not everyone can have the apartment which is closest to the sea. As in other arms races, the equilibrium is a sub-optimal one – a competitive shopping war in which everyone conspicuously over-spends. And so it is with economic behaviour more generally.

This duration mismatch means it is more likely than not that risk and reward may get out of kilter in the financial sector. The current environment is evidence of such a mismatch: while bank performance has fallen off a cliff, executive pay remains close to pre-crisis Himalayan heights. Lengthening deferral or claw-back periods, say to 10 years or more on an internationally co-ordinated basis, would help close this gap in horizons, between risk and return. It would elongate the period of liability bank managers face when they take on risk. This would better align firm-level risk-taking incentives with the societal optimum. Avoiding relative benchmarks in the setting of remuneration would also reduce the risk of an upwards-only pay escalator. 29  Bank of England (2012). 30  Bank of England (2011b). 31  Bebchuk and Fried (2003). 8  BIS central bankers’ speeches  There is scope, too, for a reconsideration of the instruments used for remuneration. The focus to date has been on non-cash distributions, often in equity. But paying in equity appears in some pre-crisis cases to have exacerbated risk-taking incentives, acting as a disincentive to raising new equity and encouraging gambles for resurrection. Remunerating in long-maturity debt, or contingent capital instruments, may do a better job of aligning risk-taking incentives with the public good than either cash or equity.32 Speed races in financial markets potentially generate societal sub-optimality, for example due to message traffic congestion.