samchain/econo-pairs-v1 huggingface dataset:
But perhaps not covered in any national media, including here in the UK, as much as one might expect. 4  BIS central bankers’ speeches  •  But there is a deeper question here about the compatibility of domestic and global objectives. In the monetary sphere, it is well known that one cannot combine capital mobility, monetary policy focused on domestic price stability, and fixed exchange rates. Solution in post-Bretton Woods world has been floating exchange rates. This does not mean there are no spillovers. Hence information sharing in Basel meetings etc. •  There is a financial trilemma too. Cannot combine cross-border banking, and an integrated international financial system more generally; financial stability; and national policies focused solely on domestic stability. •  Came home to roost in the crisis: global banks were, as Mervyn King put it, “international in life but national in death”. Financial autarky is not the answer. •  Solution: co-ordination and co-operation on the resolution of global banks. G20 Financial Stability Board has led the way here. Real progress. •  Means foreign countries have a stake in our banks, and vice versa. Means the key policies are unavoidably international, global. As a trading nation we should welcome that. I hope these brief remarks provide the basis for a good discussion. In short, the traditional roles of central banks – for the first time ever reflected in UK legislation – touch every household and business in this country and, in truth, more widely.

•  That doesn’t tackle biggest issue of all. Central banks can, to a degree, smooth the necessary adjustment of economies and so create time for households, firms, governments to strengthen their balance sheets where necessary and adjust to shifts in the relative pattern of demand for goods and services. That is what is going on in the West now. But obviously central banks cannot force others to act. And our actions can make delay seductive. •  Given central banks’ responsibility to explain, we can nudge but we must stay within our remit. •  In the present crisis, part of the real-side adjustment is needed within the banking system. For that the Bank of England does have a special role. Through the new Financial Policy Committee (FPC), we have been pressing the banking industry to adjust given the external threats, as sound banks are needed for sustainable recovery. •  This represents the first intervention of so-called macro-prudential policy. Can view the role of the FPC as being to ensure that the need for stability in the financial system is not overlooked. Looking ahead, this will mean keeping the regulatory regime up-to-date as the financial system evolves and, when the time comes, ‘taking away the punchbowl’ before the next party gets as dangerously out of control as the last one did. •  The case for operational independence here is just as strong as for monetary policy. Taking Away The Punchbowl is something that requires a medium-term orientation.
Confidence in the financial markets fell substantially last autumn and credit spreads – the difference between the interest rate on higher risk assets and that on safe assets – rose rapidly. It was initially unclear how large the consequences of the financial turbulence would be for developments in the real economy, but it soon became clear that the consequences were widespread. Credit terms were quickly tightened for companies and households in both the United States and the euro area. Lending growth also slowed down in Sweden. Households and companies went from being relatively optimistic regarding future  1  By bubble, we mean here a development, which if it continues, will evidently not be sustainable in the long term. BIS Review 162/2009  1  developments to being very pessimistic. The global economy entered a recession where demand was falling more quickly than at any other time since the Second World War. Now the financial turbulence has largely subsided as a result of the measures taken by central banks and governments, although the situation in the financial markets can still not be called normal. The global economy has begun to grow again. Although the IMF is assuming that only half of all banks’ losses have been realised, market confidence has recovered and credit spreads have fallen markedly. However, there is still uncertainty over the recovery in the world economy and the sustainability of the improvement that has occurred.

However, analysis of Spanish bank capillarity shows that between 2007 and 2017 the increase in the proportion of the population without a bank branch nearby was 0.7%, as the closures were concentrated in areas of high branch density. Also, the emergence of new technologies allows bank services to be offered using more flexible and mobile methods. In any case, we should not forget that the average size of Spanish bank branches remains small, in comparison with other European countries. This drive to correct the excessive size of the Spanish banking system has been accompanied by significant restructuring. As you well know, the financial crisis led to considerable deterioration in the quality of Spanish banks’ assets. In fact, the excessive concentration of Spanish banks on the real estate sector and the intensity of the recession caused the non-performing loan (NPL) ratio to reach, within just five years, unprecedented levels of around 14% by the end of 2013. Moreover, as a consequence of defaults, banks foreclosed a considerable volume of real estate, which formed part of the collateral for many loans. In 2014, their foreclosed assets amounted to more than € billion. The lower return on assets, along with the increase in provisions for NPLs, when a large part of the general provisions built up during the preceding expansion had been used, caused the banking industry as a whole to post a loss in 2012.
In addition, we are concerned about a reference to the threshold allowing access to the Resolution Fund being introduced into the calibration of the internal MREL; this makes no sense when resolution is carried out at parent company level. As regards the measures still needed to finalise the Banking Union, completing the resolution framework is, in my opinion, the first priority, even more so than deposit insurance, the third pillar of the Banking Union. Mario Draghi was most insistent on this in his Florence speech of 11 May. i In most large jurisdictions – the United States, the United Kingdom and Japan – the intervention capabilities of resolution funds are not capped because they are backstopped by the fiscal authorities, without being a burden on public finances, since any public outlays are generally reimbursed by the private sector. During the last financial crisis, market and depositor confidence resulting from a credit line backstopped by the US Treasury enabled the Federal Deposit Insurance Corporation (FDIC) to resolve 500 banks without tapping into the resources of the safety net. ii Today, in the event of a severe crisis in the European Banking Union, the resources of the Single Resolution Fund (SRF) could be depleted. This is why a common backstop for the Single Resolution Fund is urgently needed. Let me emphasise that the aim of a common backstop is not to bail out banks or draw on government budgets.

Conference of the ACPR – Palais Brongniart, 8 June 2018 The major issues at stake in the review of prudential supervision of banks  Speech by François Villeroy de Galhau, Governor of the Banque de France, Chairman of the Autorité de contrôle prudentiel et de résolution (ACPR)  Press contact: Mark Deen (mark.deen@banque-france.fr). Page 1 of 6 Ladies and Gentlemen, I am very pleased to welcome you to this conference of the Autorité de contrôle prudentiel et de résolution (ACPR), which this morning focuses on major issues at stake in the review of prudential supervision of banks. The subject is not new, but it is always topical. Let me first stress the greater degree of security already achieved in prudential matters: the agreement of 7 December 2017 on the finalisation of Basel III and the now standard use of macroprudential instruments. I will then touch on what remains to be done in Europe, specifically the completion of the Banking Union, an essential step. ** I. The implementation of the Basel III agreement of 7 December 2017  in Europe, fully respecting the envisaged timetable, is essential The finalisation of Basel III – and not of Basel IV, definitely not – brings to an end a decade of regulatory efforts which have considerably strengthened the resilience of the international banking system. I reiterate that the agreement of 7 December 2017 is the best possible agreement for France and for Europe.
And second, policymakers and regulators are clearly focusing more strongly on compliance risk management, because of recent developments in the corporate and political arenas. So, we have a situation where banks have growing exposure to compliance risk, at the very time that scrutiny of compliance management is intensifying. Inherent compliance exposure With respect to the former, inherent compliance exposure is clearly being affected by factors such as financial innovation, globalization and the impact of deregulation within individual countries. I will say a few words about each. New products (including structured products) are constantly being introduced, and are being used by an expanding set of market participants, as technology has improved and various market forces have incented behavioral changes. This has led to a number of compliance challenges: •  Questions for example can arise on how new instruments fit within existing legal and regulatory regimes,  •  Suitability issues can come up, given that new players entering the market may be less sophisticated than the historical set of market participants, and  •  Accounting and disclosure practices are likely to be lagging behind the rapid product innovation. Globalization and cross-border expansion present additional challenges, as firms become subject to a broader array of regulatory regimes. An immediate challenge is for the firm to assess whether conducting certain types or levels of business activity in a new country would cause it to become subject to various laws of that jurisdiction.

In several recent cases, the Federal Reserve has taken action to deal with a specific US compliance problem, while the home country supervisor has taken a leadership role in a broader action to address compliance issues across the consolidated firm. •  The Federal Reserve of course not only coordinates with financial regulators in other countries, but with other U.S. supervisors as well - both in terms of policy development and in terms of individual institution supervision. An excellent example of the former is last year’s release of the BSA/AML exam manual by the Federal Financial Institutions Examination Council. A fourth principle is that we should continue improving collaboration between the industry and supervisors. From the supervisors’ perspective, this can take a variety of forms. We have participated in formal and informal public consultations and we have supported industry-led efforts - such as the case of CRMPG II. At times, we have also brought firms together to address issues requiring collective action - as the New York Fed has done with the back-office problems faced by credit derivatives dealers. A final principle I will mention is the importance of regulatory agencies developing specialized expertise to carry out supervisory efforts, with a focus on the hiring, training, development and retention of examiner staff. Specialized examiners can, and should, be exposed to a cross section of firms, so that they can develop a perspective on state-of-the-art industry practices.
Not only in terms of the substance but also in terms of building and maintaining support for the regime, the UK has been much better served by an objective expressed in terms of a target for inflation. It is easier to explain. But that leaves open the question of what role money should play in our analysis. Some commentators want money to be important in the transmission mechanism because, after all, inflation is a monetary phenomenon; others feel that it can be placed to one side on the grounds that it is essentially endogenous and, after all, the dual of the quantity of money – interest rates – is in our models (more or less). This is an area where, given our individualistic governance structure, views on the Committee cannot be expected to be monolithic. My own view is that it is useful to recover the concept of shifts in the supply of broad money. 32 But such shifts do not have much in common with the proverbial helicopter drop; households and firms are not forced to hold the extra money, but respond to the terms and conditions on deposits offered by banks. The consequences for the macroeconomic outlook therefore depend on the nature of the underlying shock. For example, if a shock – say to the monetary regime – caused perceptions of macroeconomic risk to decline, there could plausibly be shifts in both the supply of and demand for credit.

The key assumptions of the baseline scenario are as follows: (1) a gradual improvement of the pandemic situation worldwide owing to the progress of the vaccination, the development of the herd immunity, and the absence of new, more dangerous coronavirus strains; (2) the continuing recovery of the global economy; (3) debottlenecking the supply chain; (4) phasing-out of stimulus measures in major economies beginning from 2021 H2 and timely normalisation of their monetary policies to prevent persistently rising inflationary pressure. After the accelerated recovery, the Russian economy will slow down to its potential growth rate in 2022. Taking into consideration the structural measures implemented by the Government to boost the potential growth pace, it will probably edge up to 2–3% a year over the forecast horizon. Annual inflation will go down gradually from 2021 H2 as a result of the weakening impact of temporary factors and the effect of the earlier monetary policy decisions made by the Bank of Russia. Given the actual price growth rate in 2021 H1, we expect that inflation will reach 5.7– 6.2% as of the end of the year. Next year, inflation will slow down to 4.0–4.5% and will stay close to the Bank of Russia’s 4% target further on. The key rate will average 6–7% p.a. next year and then return to its long-term neutral range estimated by the Bank of Russia at 5–6% p.a. Alternative scenarios Nevertheless, there is still significant uncertainty about how the situation might be unfolding 2/4  BIS central bankers' speeches  in the future.
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.

If a private player were to run such a system, all participating banks  18 Swish is owned by Getswish AB but administrated by Bankgirot. 19 As of April 2018. Current statistics on payments can be found on the Riksbank’s website, www.riksbank.se/sv/finansiell-stabilitet/betalningssystemet-rix/statistik-over-betalningar-i-rix/2018/. 7 [15]  would have large claims on that player, just as they have on the Riksbank at present. If such a private player were to enter bankruptcy, this money would be lost. That risk does not exist when the central bank runs the system. In addition, the central bank can supply the necessary liquidity that allows payments to function without friction. The central bank can thus function as ‘the banks’ bank’. It is therefore common for the settlement system to be placed at the central bank. It is also a service demanded by the banks themselves. Settlement in the RIX system also involves finality, which is to say that the payment is legally executed when it arrives in our system. The payment market is changing The arrival of the Internet in the late 1990s and early 2000s boosted the digitalisation of society and the payment market. New participants entered the market and many digital services linked to payments are presently offered, such as mobile solutions, electronic identification and so on. Changed consumption patterns such as increased on-line shopping are also generating demand for digital payments.
As a result they will not shift the underlying macroeconomically-relevant monetary trends in the economy, which ultimately pin down developments in the price level. They are not intended to cap or control longer-term interest rates or to offer more favourable underlying financing conditions to the institutions involved – or, for that matter, to the Government – than would have prevailed in an orderly market environment. In the spirit of the famous Bagehot rule addressing the threat of bank deposit runs, yesterday’s intervention is intended to prevent painful, adverse self-fulfilling market dynamics emerging. That is why yesterday’s intervention is a “temporary and targeted financial stability operation”. It is intended to allow the inevitable and necessary re-pricing of financial assets stemming from recent macroeconomic news – including last week’s fiscal announcements – to take place in an orderly way. So yesterday’s intervention was not a monetary policy operation. The temporary and targeted character of the Bank’s intervention is key to the distinction between financial stability and monetary policy that I have emphasised here. With that in mind, let me now turn to the responsibilities of the Monetary Policy Committee (MPC), of which I am a member. The MPC will make a comprehensive assessment of the macroeconomic and monetary situation ahead of our next meeting in early November, before coming to a decision on the monetary policy stance. Hopefully, what I am about to say is self-evident. But in current circumstances it bears saying nevertheless.

Part of it reflects the ongoing normalisation of macroeconomic policy after the pandemic-induced episode of exceptional ease. But there is undoubtedly a UK-specific component. As the Governor said in his statement on Monday afternoon, we are monitoring financial markets developments – and, in particular, that UK-specific component – very closely. Importantly, what we have seen in recent days is, to a large extent, indeed a re-pricing. When new information – such as a change to the medium-term outlook for fiscal policy – is released, one would expect the relevant assets – in this context, government bonds – to re-price. That is a healthy sign of a functioning financial market responding to fundamental news. The Bank obviously has an interest in maintaining orderly and well-functioning markets that support such healthy price formation. It also has a statutory responsibility for financial stability. The Bank takes that responsibility very seriously. Since I spoke earlier in the week, the Bank’s staff and Financial Policy Committee (FPC) have identified a market segment where orderly re-pricing threatened to descend into market dysfunction: specifically, the long-end of the gilt market – where government bonds with maturities above 20 years trade. The reasons underlying these problems are complex. I am not going to address them here, and am anyway not the best-placed person to do so.
Undermining the good name of the sector is a no-win strategy as this would limit and make the services offered by banks costlier, which would eventually harm customers and thwart economic growth. In this context, please allow me to also quote the call of the Head of State who, following his meeting with the BNB Governing Council in February, summed up the situation in a fine and very pragmatic way: “The State should continue to work for the good reputation of our banking system, which is a precondition for more favourable lending and is of benefit to people”. Looking ahead now, we need to stress that coping well in these times of crisis so far does not mean that we can afford to be less watchful or less precise in our next steps. This year, too, will be rich in new challenges. Based on the current projections for a recession in the euro area, we expect that the growth rate of the Bulgarian economy would slow down to about 0.7% in 2012, and this would have a direct impact on the potential of banks in Bulgaria to generate incomes from sources of their own. The weak demand for new loans is facing banks with a double challenge. On the one hand, it will be difficult for them to accumulate new buffers from profits; and on the other hand, the existing classified assets will go on putting pressure on the available reserves. While seeking new business opportunities, you should very carefully approach the question of capital planning.

With its twenty years of experience the ABB is now mature enough to stop looking on itself only as an intra-branch organisation and to “open up” so as to actively and publicly uphold the views of the Association members and their loyal clients. I will finish by assuring you that we at the BNB will also continue to work invariably for the financial stability of Bulgaria and to enable the banking system to support the growth of the Bulgarian economy. You know that a considerable part of our activity is done in a way that is invisible to the public, including outside the country where the BNB participates in numerous bodies and working initiatives of the EU and the ECB. An example of this is the issue of financial transaction tax – an ill-advised concept which has turned out to suit politicians with populist leanings in Europe. For over two years the BNB has been defending with firmness and argumentation the position that this tax would be detrimental to both the EU economy and the Bulgarian economy. Luckily, just a few days ago (at the informal ECOFIN meeting in Copenhagen on 30 and 31 March) some of the biggest EU countries, like Germany, which had most ardently insisted on introducing a financial transaction tax, practically gave up on that idea because reaching an agreement in the entire EU proved impossible.