samchain/econo-pairs-v1 huggingface dataset:
The bulk of the requirements effectively describe controls that each Direct Participant must have in place – and these controls collectively are designed to mitigate the key risks to the end-to-end CHAPS system and support financial and operational resilience. Importantly, this includes risks the participants pose to each other. For example, the ‘Throughput’ rules require direct participants to process a certain proportion of payments by value by fixed times in the day. By  7  https://www.bankofengland.co.uk/-/media/boe/files/payments/chaps/chaps-reference-manual 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  smoothing the flow of payments across the operating day rather being concentrated at stress points such as the end of day, this approach contributes to both financial and operational resilience. We require participants to attest to meeting the CRM requirements and we also undertake verification. But risks to the payment system are constantly changing and we need to ensure that the CRM adapts accordingly. Outages of CHAPS may disrupt the smooth flow of critical and time-sensitive payments that are core to the smooth operation of the financial system and real economy. Such outages would hurt end users and, if frequent and prolonged, potentially undermine monetary and financial stability. We are currently working on three sets of requirements to further mitigate these risks: cyber, incident management and Cloud.

First, we plan next year to enhance the Security Requirements in the CRM to align to the globally recognised National Institute of Standards and Technology (NIST) Cybersecurity Framework.8 The new requirements would align with NIST’s principles of Identify, Protect, Detect, Respond and Recover, and will be more outcome focused, balanced with prescriptive requirements when necessary. This will increasingly enable Direct Participants with different resources and business models to apply their own methodology to comply, thus supporting our strategy to allow a diverse range of financial institutions to use CHAPS. Second, the CHAPS rulebook clearly defines the Bank’s expectations around Direct Participants’ incident management approaches and reporting obligations. As I mentioned earlier, the FCA has observed a significant increase in technology-related outages across the financial industry. And for the first eight months of 2019, there were around half a dozen CHAPS Direct Participant incidents a month. The CHAPS rulebook provides an effective and timely means to manage risks through a focused root cause analysis, assignment of appropriate remediation plans and trend analysis to inform our assessment of the risks to the end-to-end CHAPS system. In line with the FCA’s analysis of incident reports,9 we have found that weaknesses in how changes are managed is a key driver behind nearly half of all CHAPS participant incidents. We are therefore revising the controls that Direct Participants should have in place in order to target areas that have contributed to incidents, for example, single-input of static data.
The median SMA respondent also anticipated euro area inflation returning to 2% at the end of 2024. Therefore, our October decision was consistent with market analysts’ expectations of a policy rate path whereby inflation is expected to return to target by the end of our medium-term projection horizon. 3  2  See Burriel, Kataryniuk, Mo reno and Viani (2022), “A new supply bo ttlenecks index based o n newspaper data”, Working Paper, Banco de España (fo rthco ming). 3  Surveys by Blo o mberg and Reuters befo re o ur Octo ber meeting po inted to similar co nclusions. However, the latest Survey o f Pro fessional Fo recasters (SPF) pro jected an inflatio n rate o f 2.4% in 2024, mo re in li ne with the ECB’s September fo recast. 2  With the recent interest rate hikes, we have made substantial progress in withdrawing monetary policy accommodation. Since July, we have raised interest rates by 200 bp – the fastest increase in the history of the euro. But we are not done yet. We will need to move rates to levels that allow inflation to converge to our 2% medium-term objective. And for this, we still have some way to go. 4 However, given the high degree of uncertainty of the inflation and economic outlook, the specific level that interest rates may have to reach to be consistent with this objective is uncertain, as it is entirely data-dependent and may change over time.

First, appropriate intervention by supervisors vis-à-vis prime brokers to make sure that they ask for and get broad information from hedge funds and that they put in  12  Angeloni, Kashyap and Mojon, 2003  13  Noyer, 2006a  14  Noyer, 2007  4  BIS Review 42/2007  place comprehensive risk management of all hedge funds-related exposures is essential. Second, there may be scope for policy-makers to encourage appropriate organisation of infrastructure in order to improve the information available on the markets in which hedge funds operate. Third, a specific information system to be triggered in the event of a crisis could be established ex ante in order to ensure that relevant information on exposures and positions could be quickly gathered if necessary. -  At the macroeconomic level •  Increased financial asset holding resulting from financial innovation is likely to result in higher sensitivity of households to asset price booms and busts 15 . On the liabilities side of non-financial agents’ balance sheets, by facilitating the management of risk and easing liquidity constraints, financial innovation stimulates both the supply of and demand for credit, which may lead to higher leveraging and financial fragility. Note that both effects run counter to the result I mentioned at the start, i.e. that financial innovation tends to reduce growth volatility. Although this result may still hold true in normal circumstances, it may thus be reversed in specific ones, especially in stress situations.
They also include the fact that the distribution of income and productivity across regions has been uneven: the pie has been unequally sliced. The opportunities flow from these challenges. Given these sharp regional differences, if a way could be found of raising the productivity of lower-performing regions, this could have a material impact on aggregate productivity and hence national income. For example, if all of the regions in the lower part of the productivity distribution were lifted to the UK average, this would raise average levels of UK productivity by around 6%. If all regions were lifted to the average level of London and the South East, this would raise the average level of UK productivity by 20%. Levels of UK productivity would then rival those in France and Germany. But how is this to be achieved? At least over the longer run, it is reasonably clear that monetary policy is ill-equipped for the task of either expanding the economic pie or altering the way it is sliced. Over those horizons, nominal things like money and monetary policy cannot affect real things like productivity, skills and investment. In the language of economics, money and monetary policy are neutral in their impact. 14  You do not have to be an economic theorist to see why. If printing money or setting interest rates had a durable impact on activity, incomes and living standards, economic policy would be simple and we would have long since cracked it.

This is currently around 12% lower than immediately prior to the EU referendum. Indeed, uncertainty about the outcome had already caused the exchange rate to depreciate ahead of the vote, such that it is now 17% lower than a year ago. The Bank’s contacts in financial markets attribute this fall in sterling to expectations that the UK’s future trading arrangements, and hence income-earning capacity, will be materially less favourable than at present. Whatever the precise explanation for sterling’s fall, its near-term impact on inflation and growth is likely to be significant. It will provide some support for net exports in the short-term. But it will also cause a sharp rise in import prices, and in time consumer prices, over the course of the next few years. That will in turn tend to depress inflation-adjusted household incomes, and hence consumer spending, over this period. It is unclear at present how the disconnect between the relative optimism of households and some companies, on the one hand, and the relative pessimism of financial market players and the other half of companies, on the other, will be reconciled. Is this a case of skittish financial market players over-sensitive to economic risks that may never materialise? Or sluggish consumers insensitive to the weaker economic prospects that lie ahead? Only time will tell. In the meantime, however, the MPC needs to form its own judgement on prospects for inflation and output. These were set out in the November Inflation Report.
These rules set provisioning percentages based on risk and criteria so that banks may make an assessment of country risk by monitoring economic developments and the political and institutional situation; further, they contain exemptions arrangements, with such exemptions depending on the type of transaction, its term and the modus operandi. Notably, these rules do not affect foreign direct investment by the Spanish financial system, since they do not apply to debt instruments and to contingent risks, nor to risks vis-à-vis European Union countries. The impact of these rules on foreign trade is low since most trade finance products are not subject to country risk provisioning. Trade credits with a maturity not exceeding one year are exempt, as are pre-financing credits with a term equal to or less than six months for specific export agreements. The rules also provide for an exemption for CESCE insurance operations, which is an added incentive for banks to have this guarantee in medium- and long-term transactions since, in addition to eliminating default risk, they do not then have to set aside country risk provisions. The prudential treatment of instruments supporting internationalisation and, specifically, of instruments linked to short-term trade transactions draws on two significant regulatory frameworks: Basel III, at the international level; and the Regulation (which is directly applicable in all Member States) and the Directive on prudential requirements and their attendant supervision, drafted within the European Union, namely Regulation (EU) No.

This trajectory is all the more significant when compared with events in other developed economies and, in general, in the euro area as a whole, where export shares fell during the crisis. Our sound export performance has been underpinned both by gains in competitiveness and the pick-up in external demand, as well as by more structural factors, allowing us to expect this potential to continue and become more entrenched in the long run. The structural factors include the geographical diversification of exports of Spanish goods and services to emerging markets and the more export-oriented gearing of our companies, which is reflected in the increase over recent years in the number of Spanish companies competing on international markets. The re-directing of exports towards emerging markets has contributed significantly to these developments, thanks to the substantial dynamism of the demand for imports in those BIS central bankers’ speeches  1  countries. Indeed, their dynamism has compensated for the cyclical weakness in the developed countries, particularly in the euro area. The relative weight of goods exports to emerging countries has increased since 2007, coming to account for 30% of the total. The increases have been across the board, although particular mention may be made of Latin America, China and North Africa. However, the share of the developed countries has fallen on the same scale, owing to the loss in the weight of sales to the euro area, which at end-2013 stood slightly below 50%.
The stock of Swedish covered bonds (housing bonds) issued in Swedish kronor (SEK) is just under SEK 2,000 billion. This is more than double the size of the outstanding volume of government bonds in the same currency. The stock of corporate bonds issued in SEK corresponds to almost 700 billion, while the stock of municipal bonds issued in SEK by municipalities and Kommuninvest is just over 400 billion. All in all, this means that the Riksbank has the possibility to increase its bond purchases. However, the fact that the possibility exists does not make it an appropriate measure. There are several aspects to consider; for example, how it affects resource distribution in the economy and the risks for to the Riksbank’s balance sheet. Another issue is whether the Riksbank should consider sustainability aspects in its bond purchases. I will come back to this at the end of my speech. Allow me to summarise what I have discussed so far. I feel confident that the Riksbank can act with strength and security if a crisis threatens to destabilise the Swedish economy. However, we should be humble when it comes to the difficult considerations that may then be required in monetary policy. The scope for combatting a severe downturn in the Swedish economy is improved substantially if other policy areas also contribute, in particular fiscal policy.13 The remaining issue is the most difficult – should central banks just try to combat the potential negative effects of climate change or should they also act to combat climate change itself?

Also, the IMF assumes solid growth of the Macedonian economy of 3.2% in 2014, which is higher than the growth projected for the regional countries and wider, and provides a clear vision that there is potential for achieving the economic growth. As the central bank, for us, it is extremely important that the surveyed companies largely expect increase in the exports. Thus the larger export potential, the higher foreign exchange inflows, i.e. narrowed trade imbalance. After all, in 2013 we witnessed trade deficit narrowing in the trade of goods that equaled about Euro 190 million, annually, given the increase in the exports (of 3.2%/3.9% in services) and a decrease in imports (of 1.5%/0.9% in services). This improvement in the trade is closely linked to the increase in the production capacity of the economy, i.e. the increase in the export potential. The policies that were applied in the previous period, which were aimed at attracting foreign investors in the tradable goods sector, which meant export diversification, proved as a good pillar for reducing the foreign trade imbalance. The export growth capacity of TIDZs plans indicated that the foreign exchange rate is not a barrier to exports, i.e. that it is not overvalued. On the contrary, the stability of the Denar exchange rate, in the past against the Deutsche Mark, and today against the Euro, is an important pillar of all business decisions.
Changes in the population pyramid, increased immigration, the growth of the demand for second homes by residents and nonresidents and, above all, the continuous growth of income and the pronounced fall in interest rates are factors that help explain the trend growth of the relative price of housing in Spain. In addition, the unfavourable course of stock market prices in the last three years has enhanced the attractiveness of alternative investment opportunities, such as those offered by real estate. Yet in a market such as that for property which, by its very nature, sees supply adjust relatively slowly, demand pressures such as those arising from the aforementioned factors may cause excessive price reactions that tend to be corrected subsequently. This appears to be the situation currently in our country where, even with a significant rise in the rate at which houses are built, property values may have exceeded the levels consistent with the trajectory of their determinants. In such a situation, it is likely -and desirable- that house-price growth rates will be brought back progressively and in an orderly fashion to levels more in line with their fundamentals. This process, which should run parallel to gradual moderation in the resort to credit financing by the households and companies most directly involved in the real estate business, would prevent house prices from moving too far away from their equilibrium value.

In late 2002 and early 2003, the economic outlook and the trend of financial variables in Latin America improved perceptibly, especially following the positive developments in Brazil and Argentina. The recent crises have highlighted deep-seated shortcomings in the legal and institutional workings of these countries. Emphasis has thus been placed not only on the need to pursue policies supportive of monetary, financial and fiscal stability, but also on how important an institutional framework respectful of property rights and private enterprise is for fostering growth in these countries. Factors of a more global nature have also been pivotal in the recent crises. These have been related to greater risk-aversion on international financial markets, which has caused capital flows to some of these emerging economies to shrink. International markets have, however, tended to be more selective, and there have been fewer episodes of crises spreading from one country to another, although contagion cannot be said to have disappeared completely. The recurrence of these crises has led to reflection on the so-called “architecture” of the international financial system. Numerous reforms have been proposed in this connection. And some have been adopted, and are generally in the initial stages of implementation. Much remains to be done in this area, although the acceptance of sovereign bonds incorporating the so-called collective action clauses, issued by Mexico, Brazil and Uruguay, offer grounds for hope.
Although I believe that low inflation fosters financial stability, it would be wrong to disregard the possibility that changes in the inflationary process can have unintended consequences for the stability of the financial system. The success in bringing down inflation has lowered both nominal and real interest rates. Moreover, factors such as the integration of emerging markets into the world trading system, and high productivity growth, has put downward pressure on prices of manufactured goods. This may have induced key interest rates to be lower, than what otherwise would have been justified in this cyclical position of the economy. Given the fact that the low inflation regime has yielded high and stable growth, in conjunction with low interest rates, it is no wonder that asset prices have surged. While much of this price movement is fundamentally based, there is a risk that households and firms might become too optimistic about future earnings and interest rates. Put differently, there is a risk that  1  2  See e.g. Schinasi, G. (2004): ”Defining Financial Stability”, IMF Working Paper, WP/04/187. BIS Review 101/2007  asset prices rise to unsustainable levels during the transition from a regime with high inflation to a regime with low inflation. Another, but not unrelated issue, concerns how risk is priced in the credit markets. The last few years saw risk premiums in credit markets falling to record low levels.

The general public’s expectations of inflation two years ahead are below 2%, which suggests that the inflation targeting policy has achieved credibility – a matter that is crucial for monetary policy’s ability to produce good results. The foundation for monetary policy credibility has been strengthened in that the new legislation in force from the beginning of this year has created a more independent central bank. Maintaining price stability is now the Riksbank’s statutory function. The Riksbank has defined its target as being to keep annual inflation, expressed as the change in the consumer price index (CPI), at 2%. The ambition to keep inflation low stems from the insights about inflation’s harmful effects on the economy – that higher growth and employment cannot be generated in the longer run by means of higher inflation. It is other matters, such as how the economy functions, achievements in technology and the educational system, that determine those factors. The best way for monetary policy to contribute to high growth and employment is therefore to improve the long-term growth potential via low inflation. To achieve its objective, the Riksbank uses its instrumental rate, the repo rate. If the Riksbank’s monetary stance is unduly expansionary, that is, if the repo rate is too low to ensure macroeconomic balance, in time the economy will be liable to overheat. Demand then grows more rapidly than production capacity and this generates inflationary pressures.
The financial markets are becoming increasingly integrated, banks are crossing more and more boundaries and so on. All this is affecting the Riksbank to a high degree. The same is true of the rapid technical innovations, with increasingly complex payment systems. Add to this the possibility of EMU and you can see the future does not lack challenges. Apropos of what I have been talking about today, a while ago one of my American colleagues, Bill McDonough, said something to this effect: we should be pleased if we are better today than we were yesterday at the same time as we are not yet as capable as we will be tomorrow. I think that's about right. 4  BIS Review 51/2001

They will benefit all member states in the single market. However, they will take time to design and longer to implement, and they will have no impact on the burden of the debt overhang that already exists. For complete solutions to both current and potential future problems the sharing of fiscal risks is required. It is no coincidence that effective currency unions tend to have centralised fiscal authorities whose spending is a sizeable share of GDP – averaging over a quarter of GDP for advanced countries outside the euro area (Table 1). I have already discussed how parts of the UK have benefitted from fiscal risk sharing. The euro area also stands out from federal systems like the US, Canada and Germany. In those systems, the impact of localised shocks to income is reduced by between one tenth and one fifth by centralised fiscal transfers (Chart 6). Without this risk sharing, the euro area finds itself in an odd position. As the Presidents of the European Council, European Commission, Eurogroup and European Central Bank argued in their report, European Monetary Union will not be complete until it builds mechanisms to share fiscal sovereignty. Possible options for sharing fiscal risks range from a transfer union to a pooled employment insurance mechanism. The latter would appear to be an opportunity to combine the current enthusiasm for labour market reform with the longer term imperative to build elements of an efficient transfer union. And it would ensure risk sharing was based on cyclical, rather than structural, labour market positions.