samchain/econo-pairs-v1 huggingface dataset:
It is in the region’s interest that we should cooperate to increase our collective strength. I hope you, as key decision makers of your exchanges, will take this opportunity to consider possible ways of working together. EAOSEF is well placed to facilitate this process. I wish you a fruitful discussion at this forum. 1  Asia Economic Monitor, Asian Development Bank, December 2003. 2  The Asia/Pacific region accounted for 90% of total flows into emerging markets. Reference: Capital Flows to Emerging Market Economies, The Institute of International Finance, Inc., 15 Jan 2004. 4  BIS Review 22/2004

In this regard, I would like to summarise the main findings of two recent surveys undertaken, respectively, by the EIB and the ECB. The EIB Investment Survey, which is run annually, included in 2018 some questions on firms’ demand for skills and digitalisation activities in the EU and the US. More specifically, 888 firms in the EU and 800 firms in the US were surveyed4. This survey shows that EU firms lag their US peers in terms of adoption rates in the services sector whereas adoption rates in the manufacturing sector are similar on both sides of the Atlantic. It also shows that larger firms are more likely to adopt digital technologies than smaller ones. The ECB Digitalisation Survey is an ad-hoc survey which interviewed 74 very large nonfinancial companies from the euro area5. This survey shows that among large companies the take-up of digital technologies is very high, with big data and cloud computing being the most widely adopted. When it comes to the impact of digitalisation on firm performance, the results of both surveys are highly consistent. They find that digitalisation has a positive impact on firm productivity, driven by the possibility of sharing knowledge more easily and more efficient production processes. It also has a positive effect on sales mainly due to better access to customers. Digital firms invest more, especially in intangible assets, and innovate more than non-digital firms. As regards perceived obstacles, digital firms report difficulties at recruiting and retaining highly skilled ICT staff.
That explains why we belong to two societies, our own and the European one as the essential cultural background for our universal- aspiring values. In this sense, Europe is a memory, a key to understanding our own past. However, the EU, and even more so the EA, are political projects and what we want now is to pursue the project of completing and deepening the integration of European nations in a unique community of destiny that is neither a nation nor a State. It is a powerful vision of preserving and defending national identities and interests in a globalized and very challenging world. If we would fail, as Helmut Schmidt said:” For us, European citizens, that decadence would be a tragedy, meaning the loss of our self-determination”. 14 We can only hope that our past and community of culture will help us to be successful in our endeavour. Thank you for your attention. 13  Rodrik, D. (2011) “The Globalization Paradox: Why Global Markets, States, and Democracy Can’t Coexist”, Oxford University Press. 14  Schmidt, H. (2000) “Die Selbstbehauptung Europas” Verlags-Anstalt. French translation : “L’europe s’affirme: perspectives pour le XXI éme siècle” B. de Fallois (2001). 10  BIS central bankers’ speeches

The greater price transparency in the European market brought about by the euro’s launch also has an influence on Switzerland’s domestic economy, heightening awareness of the need for structural changes. Finally, initial fears that the exchange rate relation between the Swiss franc and the euro might be destabilised by the introduction of the euro have not come true. Notwithstanding a few fluctuations, the relation between the two currencies has remained remarkably stable. Overall, therefore, the cohabitation between the Swiss franc and the euro is definitely a “success story”. BIS Review 49/2003  1
Over a mediumterm horizon, balance of payments trends remain unchanged. This year’s revision of the estimate for foreign currency reserves from $ billion to $ billion comes a result of higher foreign currency purchase volumes based on the fiscal rule in the context of higher oil prices. In conclusion, I would like to make the following comment. Should the situation unfold according to our baseline forecast, we hold open the prospect of a key rate reduction somewhat sooner than we assumed back in December last year. We do not rule out that this may occur in 2019. The Bank of Russia will make its key rate decisions, as it always does, taking into account inflation and economic dynamics against the forecast as well as risks posed by external conditions and the reaction of financial markets. 3/3  BIS central bankers' speeches

At the same time, indications of a possible slowdown in momentum became visible during the course of 2013.8 Taken together, these developments make it difficult to judge precisely where we are in the credit cycle or the direction in which we are heading. This situation is an example of the fundamental identification difficulty  8  Nominal growth rates for mortgage claims have slowed to about 4.5% from around 5% in the two preceding years. At the same time, apartment price growth has slowed from 6.8% (average growth rate in 2012) to 5.2% in Q2 2013 (annual growth rates of nominal transactions prices based on quarterly data provided by Wüest&Partner). 4  BIS central bankers’ speeches  pertaining to the analysis of the financial cycle. Further academic advances in the development of new tools to help identify cyclical risks would be highly welcome. The lessons are clear, however. In the current environment of significant uncertainty and persistent risk, prudent behaviour on the part of all actors is called for. For banks, this means applying conservative lending criteria in terms of both loan-to-value ratios and affordability. For borrowers, it means bearing in mind that real estate prices are already at elevated levels and ensuring that, even if interest rates were to rise sharply, they could afford to service a loan. And finally, for regulators, it means continuing to monitor the situation very closely and being ready to take further regulatory measures, if the hopes of a soft landing are not fulfilled. References Bank for International Settlements (2011).
We realize that these reforms pose a major challenge to the banking system in Thailand as in the global market. However, the process of policy consultation and dialogue with the banking sector has assured us that banks are able to cope, although some more so than others. Nevertheless, IAS 39 will improve the transparency and provision buffer against impaired assets, while Basel II has already raised the standard of risk management that will be absolutely crucial going forward. In summary, We are moving in the right direction and are in a good position to build on this reform and to consolidate our progress. How well-founded is our confidence? As you know, we are currently undergoing the Financial Sector Assessment Programme or FSAP with the IMF and the World Bank, which assesses the supervisory process and financial sector soundness. Preliminary findings on our compliance to the BIS core principles of banking supervision are favorable, with the results mostly fully compliant and largely compliant. All in all, Thailand's supervisory system compares well to international best practices. The only exception, as we all know, has to do with the inadequacy of the current legal infrastructure that provides for the Central Bank's autonomy and explicit supervisory power in key areas. I must thank the tremendous effort and cooperation made by the banking sector throughout the whole FSAP process thus far. The next phase of the process will involve the stress test analysis of the banking system, which again, will require your cooperation.

This ‘fire sale’ pressure can matter. It can help to drive asset prices down and tighten credit conditions during downturns. It is therefore striking that, the more illiquid (that is, difficult to trade) are the assets held in an open-ended fund, the more aggressively its investors withdraw their funds as the prices of the assets held in the fund fall. See ‘The FPC’s assessment of the risks from leverage in the non-bank financial system’, Financial Stability Report, November 2018. See FSB, ‘Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities’, January 2017. 15 See IOSCO, ‘IOSCO Report: Leverage’, Consultation Paper, November 2018. 16 See FSB, ‘Global Monitoring Report on Non-Bank Financial Intermediation 2018’, February 2019. 13 14  17  All speeches are available online at www.bankofengland.co.uk/news/speeches  17  When a fund holds assets traded almost instantly on exchange – like blue-chip equities – investors tend to sit on their hands. At the other end of the spectrum, investors in open-ended funds holding commercial real estate – which, on average, takes 298 days to sell – take out 0.6% of their money for every 1% fall in the value of their funds. Investors in corporate bond funds behave similarly (Chart 18).
The credit quality of loans backed by the State through the Official Credit Institute (ICO) deteriorated somewhat in 2021, although at a slower pace than in the previous half-year. At December 2021, 20.2% of ICO-backed loans were classified as Stage 2 exposures (up 3.9 pp on June 2021), and 3.5% as NPLs (up 1.4 pp on June 2021). It must be noted, however, that 30% of these loans continue to benefit from grace periods, which will come to an end in summer 2022.6 In the present setting, these credit exposures with some sign of impairment may, in turn, be more vulnerable to the materialisation of risk. Accordingly, careful monitoring is needed, together with early and correct recognition of potential losses. Third, profitability improved substantially7 in 2021. Specifically, return on assets (ROA) stood at 0.67% (compared with -0.21% in 2020 and with 0.51% in 2019). 6  In the sectors hardest hit by the COVID-19 crisis, the proportion of Stage 2 loans is higher (35.5% and 22.7% in hospitality and transport, respectively); this is also true of NPLs (6.5% and 4.5% in hospitality and transport, respectively). 7  Consolidated net profit totalled € billion in 2021, an increase of € billion on the losses recorded in 2020. 7  Extraordinary items, which were negative in 2020 and positive in 2021,8 had the most impact on profitability. Excluding extraordinaries, ROA stood at 0.57%, an increase of 37 basis points (bp) on 2020 and down just slightly compared with 2019 (0.63%).

This is largely because some firms in these sectors were already close to the thresholds determining vulnerable status before the shock. 14  For households, an interest rate rise could contribute to some deterioration in their debt repayment capacity. But the effect of moderate rate hikes is not expected to be very significant, partly because of the increase in recent years in the proportion of fixedrate mortgages, which accounted for 24.9% of the outstanding amount at December 2021. Specifically it is estimated that the proportion of households with a high net interest burden28 would rise by 1.2 pp, 2.3 pp and 3.9 pp if interbank rates were raised by 100 bp, 200 bp and 300 bp, respectively. These effects would be most pronounced among indebted households between the 20th and 40th percentiles of the income distribution.29 Low-income households would be most affected by rising energy prices, as energy expenditure accounts for a larger proportion of their consumption,30 they are less likely to be able to absorb these higher prices by reducing their saving and their net interest burden is higher. 28  The net interest burden is considered to be high when the ratio of (debt service expenses - interest income from deposits) to household income is over 40%.
A bank neither has to put aside capital for government bonds nor is bound by an upper limit on how much it can be indebted vis-à-vis an individual sovereign debtor. On the one hand, government bonds are treated as if they were risk-free. On the other hand, banks may easily hold very many government bonds of a single issuer – and this is usually the home country. First, banks in this way increase their exposure to the financial problems of states. Because government bonds are not as risk-free as the regulation assumes. The crisis has shown this. Second, it becomes easier for an individual state to run a loose fiscal policy. It’s becoming more likely that systemic problems are emerging or intensifying: a state infects the national banking system, or vice versa, and the problems spread across borders. Such systemic risks can then only be kept in check by way of a fiscal risk-sharing. In order to promote ownership and private risk-sharing, we must revise the preferential regulatory treatment of sovereign debt. One option is to introduce a risk weighting for government bonds which rises along with the concentration risk. The more government bonds held by a bank, the more capital the bank would have to hold against each of these bonds. In this way, the capital requirement and upper limit would be combined in a single rule.

Many countries are now on the right track. Ireland, Spain and Portugal, for example, have implemented a series of reforms; they have become more competitive and their economies are recovering. And yet, in some euro area countries, unemployment remains very high, especially among young people. In addition, many countries still have large public deficits and high levels of debt. So further reforms are necessary here. The same applies to goods markets and the general business environment. In many Member States bureaucratic hurdles have to be overcome in order to start a business, and not only in the crisis countries. Removing such administrative barriers is much  2  BIS central bankers’ speeches  less expensive than national recovery plans, and can contribute significantly to sustained growth and increasing prosperity. 2 It is all the more worrying that the OECD in its recent “Economic Policy Reforms” report notes that particularly in the euro area countries the pace of reform is slowing. It would be disastrous if necessary reforms cannot be implemented or, if implemented, reforms were even to be withdrawn. That would slow down, or even totally impede, the necessary economic upswing. Central banks would then come under pressure to counteract this by pursuing an exceptionally loose monetary policy. A stable monetary union rests on the shoulders of individual Member States. Sound economic and responsible fiscal policies at national level are an essential basis for a stable monetary union.
10  Chainalysis (2021), “The 2021 Geography of Cryptocurrency Report”. The Banco de España does not guarantee the accuracy of these figures as they depend, exclusively, on the data processing capacity of a private provider. 11  J. M. Carbó and S. Gorjón (2022), “Application of machine learning models and interpretability techniques to identify the determinants of the price of bitcoin”, Working Paper No 2215, Banco de España. 4  volatility is much more pronounced in the case of unbacked crypto-assets, but it also impacts others. Moreover, interconnections with the rest of the financial system have increased substantially. One such example is the sudden rise in the number of crypto-asset investors (both institutional and retail). In addition, the range of sophisticated products around cryptoassets has expanded, with a growing portfolio of exchange-traded funds (ETFs),12 investment funds and futures contracts referenced to crypto-assets. The latter was key to attracting new investor cohorts to the digital assets’ space.13 What’s more, some large private firms did publicly announce their interest in using cryptoassets for cash management purposes, while others were campaigning in favour of their wide acceptance as a means of payment.14 Some major financial players, such as global banks and international card service providers, have enlarged the selection of ancillary services around digital assets (including custody and trading services) which they offer or have allowed them to be used directly as a medium of exchange in their proprietary networks.

For example, the combination of a cold winter and a dry summer contributed to a 26 percent rise in electricity prices, as measured by the consumer price index, in 2018. Negative supply shocks thus lead to lower output but higher inflation. This poses a dilemma for monetary policy. Should the policy rate be raised to curb inflation? Or should it be lowered to stimulate the economy? Chart: Quarterly growth Norway, autumn 2018 With our flexible inflation targeting regime, we will not usually change the policy rate if a supply shock is transient. One example is the decline in agricultural production in Norway in 2018 as a result of an unusually hot and dry summer. Production fell by 40 percent in the third quarter. Even though Norway’s agricultural sector is small, the fall in production led to a decline in economic 2/7  BIS central bankers' speeches  growth between the second and third quarter. We assessed the decline as transient, and the policy rate was not changed. However, if such an event leads to a persistent rise in inflation in the next round, this may affect the policy rate. So far, more unstable weather has only had short-term effects on output, employment and inflation in Norway and other advanced economies. Wide fluctuations have been observed in food and energy prices in particular1, but there have up to now been few instances of physical climate change influencing macroeconomic developments in these countries.
Rodrigo Vergara: Monetary policy through asset markets – lessons from unconventional measures and implications for an integrated world Opening remarks by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, at the Central Bank of Chile’s Nineteenth Annual Conference, Santiago, 19 November 2015. *  *  *  Monetary policy has mostly been about setting the appropriate interest rates to stir the economy towards a path coherent with its fundamentals. In this sense, the developments in most central banks in the last 6 years have not been out of the box, so to speak. But we can probably say, with little risk of overstating reality, that the ways of achieving changes in the cost of credit through monetary policy has changed significantly since the global financial crisis. To fully appreciate the extent of these changes, it’s useful to do a quick recap of what traditional monetary policy was prior to 2008. In the vast majority of countries, the name of the game was setting the stance of the short term rates –indeed, the overnight rate at which banks lend to each other. The hope was that, by influencing this very short-term rate, monetary policy actions would feed into the broader economy by affecting longer term rates, as well as spreads of riskier forms of credit which in the end are the channels by which the policy stance affects the cost of borrowing of households and firms.

Quoting from his paper: “the future policy that one wishes for people to anticipate is one that the central bank will not have a motive to implement later, if it makes its decisions then in a purely forward-looking way, on the basis of its usual stabilization objectives.” (end  BIS central bankers’ speeches  1  quote) This does seem like a hard conundrum to get away from, and probably limits the traction of this type of tool as a strong driver of longer-term rates. Partly due to these limitations, Central banks have also directly tackled the term premium by purchasing large quantities of long-term assets. The idea is that by removing some duration from the fixed income markets, private investors’ aggregate exposure to interest rate risk is diminished, leading to a lower required compensation for bearing such risk. Of course, this logic relies on some form of imperfections and/or market segmentation, but there is by now significant evidence, including some excellent papers to be presented in this conference, that QE has had a measurable impact on long-term rates through this channel. A similar logic applies to the default risk-premium: to the extent that returns on safer debt are compressed by central bank purchases, investors are tempted to reach for yield into other fixed-income markets, such as mortgages, corporate bonds, and emerging market instruments.
They are regular companies, which lend to firms and households, financed by issuing bonds and short-term commercial paper (CP) rather than by taking deposits. It can be tempting for them to extract a term premium by increasing their maturity mismatch. Some did so during the boom years. In the US and UK during the crisis, alongside the CP market more generally, they were given access by central banks to what in effect were discount-window type liquidity-insurance facilities. It is not obvious to me that they should be regulated as commercial banks, as they do not provide monetary/payments services. But it is clear that this part of the credit system became fragile due to leverage and maturity mismatches. It relied on the CP market remaining open; and thus on money funds maintaining demand for corporate and finance-company CP; and, if that demand dried up, they relied on banks being able and willing to honour the committed lines that underpinned those CP programmes. But for too long and in too many countries, regulation did not adequately capture the associated credit and liquidity risk. The result was a shadow financing (or credit) system that was effectively dependent in adverse circumstances on the banking system, but without the banks being ready and able to support it through systematic stress. 4  There were warnings years ago; for example in Edwards F (1996), “The New Finance: Regulation and Financial Stability”, American Enterprise Institute.

Overall, it is surprising how little commentary there has been from the perspective of securities market regulators. An exception is Luigi Zingales, “The Future of Securities Regulation”, Chicago Booth School of Business Working Paper No. 08–27. While I do not necessarily support all of his prescriptions, the paper is noteworthy for approaching the reform agenda from the perspective of securities markets and regulation rather than solely that of bank soundness and prudential supervision. 12  See Gorton, op cit. 13  See Bank for International Settlements (1986), “Recent innovations in international banking”, prepared by a Study Group established by the Central Banks of the Group of Ten Countries, known as “the Cross Report”. 14  For examples of market intelligence on innovations at the beginning of the latest cycle see, Rule D (2001), “Risk transfer between banks, insurance companies and capital markets: An overview”, Bank of England Financial Stability Review, December 2001. BIS Review 6/2010  7  “shadowing banking” has become significant to sustaining stability in the provision of essential financial services to the broader economy; when it is founded on liquidity lines, incomplete risk transfer or other kinds of support from the core commercial banking system; and when it involves the provision of the liquidity or monetary functions of banking as well as credit intermediation. Running leverage and liquidity risk is not sufficient to make a firm or fund a de facto bank. I do not think AIG’s securities lending/credit spread business was really a bank. More like a hedge fund.