samchain/econo-pairs-v1 huggingface dataset:
In these firms, formal policies and procedures do not reflect “the way things are really done.” The stated values of the organization are not reflected in senior leader behaviors and actions of the 2/5  BIS central bankers' speeches  organization’s members, and misconduct results from norms and pressures that drive individuals to make decisions that are not aligned with the values, business strategies, and risk appetite set by the board and senior leaders. Employees do not speak freely when they have concerns, and senior managers or the board of directors do not find out about improper conduct until it is uncovered by the authorities. Rules may be followed to the letter, but not in spirit. All of this increases misconduct risk and potentially damages the firm and the industry over time. Like other forms of tangible and intangible capital, firms must invest or its capital will deteriorate over time and adversely impact the firm’s productive capacity. To be clear, cultural capital is not loss absorbing like equity capital, but it can be loss preventing by influencing decisions, behaviors, and outcomes over time. Market Failures and Misconduct Risk If this is the case and misconduct risk is bad for the firm, some obvious questions follow: Why don’t firms invest in cultural capital and reduce the risk themselves? Why do regulators and supervisors need to get involved? I believe firms are ultimately responsible for these decisions and we do observe progress.

Philipp M Hildebrand: Ten theories on the economic relationship Switzerland Europe Summary of a speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, to the Arbeitgeberverband Basel, Basel, 8 September 2004. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The relationship between Switzerland and the EU is close in so many ways that it appears almost stronger than that among many member states themselves. The debate on a possible integration into the EU as a logical consequence should be as broad-based as possible. Economically speaking, the issue has become more pressing since the introduction of the euro, as Switzerland is now surrounded by a single-currency area. Switzerland’s weaker economic growth is also frequently quoted as an argument in favour of integration, since the necessary domestic structural reforms would then be easier to realise. However, one tends to overlook the fact that the national authorities would continue to be responsible for implementing reforms and that, moreover, the absorption potential of autonomous monetary and fiscal policies would be forfeited. Even with an independent policy, Switzerland is in a position to outperform if it again focuses on its strengths of flexibility and openness. The independent monetary policy has helped to keep inflation in Switzerland at a low level for decades. This and the diversification properties of the Swiss franc make capital cheaper in Switzerland by approximately 1.5 percentage points (interest premium).
This pan-European solution would be a major step forward that would help European banks withstand the challenges posed by the BigTechs. There is also another important area where we need to make headway: reducing the cost and speeding up the execution of cross-border payments by identifying concrete and useful solutions. Our aim should notably be to harmonise the technical standards used for transfers of funds, and to enhance the interoperability of payment systems and solutions. Between now and the autumn, the FSB, under the aegis of the G20, will propose concrete measures to make cross-border, extra-European payments significantly cheaper and faster. I shall turn now to a topic that is a major challenge for the future of the international monetary and financial system: the possible creation of a central bank digital currency (CBDC). The creation of a new form of currency by central banks goes beyond the challenges I have just mentioned: it is neither a precondition for nor a guarantee of more efficient payments. However, we as central banks must and want to take up this call for innovation at a time when private initiatives – especially payments between financial players – and technologies are accelerating, and public and political demand is increasing. Other countries have paved the way; it is now up to us to play our part, both ambitiously and methodically. To this end, the Banque de France is to be reorganised.

Confidence first and foremost in the currency: everyone will be free to use the payment instrument of their choice, and that still includes cash. Confidence, as well, in the ability of financial institutions to finance the economy. And the ACPR will continue and step up its efforts – notably through its FINTECH Innovation unit – to monitor all innovations that impact these methods of financing. Thank you for your attention. 4/4  BIS central bankers' speeches
Funds investing in less liquid instruments have grown quickly at the same time as market liquidity has gone in the other direction. Market liquidity, particularly in dealer intermediated markets is lower than in the decade before the crisis. 12  Banks’ risk appetite and business models have changed and regulation has  ensured that they are adequately capitalised for the risks they run as market makers. In 2015 the Bank of England and Financial Conduct Authority conducted a joint information-gathering exercise on 17 asset management firms and 143 of their funds, focusing on those with large holdings of corporate bonds. One key finding was that funds individually were assuming more liquidity than might be available if there was market-wide selling pressure. For example, in the dollar corporate bond market, funds’ individual expectations of what could be liquidated in a day, when aggregated together, was three times daily market turnover. 13  The risk of sharply falling markets triggering large-scale redemptions is exacerbated by the fact that many retail funds offer investors daily liquidity, regardless of the nature of the fund’s investments. Individual funds do of course have a variety of mechanisms – ‘gates’, penalties, discounts, suspensions, etc – to help manage large-scale redemption pressure. But in an episode of severe market stress, it is not at all clear whether activation of such mechanisms by funds under stress would dampen rather than amplify redemption pressure across the market more generally.

See for example, Allard and Blavy (2011): “market-based economies experience significantly and durably stronger rebounds than the bank-based ones (in particular the more bank-based economies of continental Europe).” 5 Carney (2014) 6 In contrast, at Northern Rock over the second half of 2016 retail and wholesale deposits each fell by nearly 60%. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  In a major crisis, market-based finance might therefore be expected to be a materially less disruptive way of passing very substantial losses back to end investors than bank lending. This is particularly true in the case of international capital flows where bank lending across borders, particularly short term inter-bank lending, can create an explosive channel of transmission of systemic risk from one jurisdiction to the next if banks do not have the resilience to absorb major losses and authorities are not able to resolve them safely if they fail. 7  It is no accident that the ECB identified market-based finance as an important risk sharing mechanism between euro area countries and encouraged the development of an EU Capital Markets Union. 8  Risks in market-based finance I have noted the trend in market-based finance away from the activities that amplified stress during the financial crisis. And I have tried to explain why, viewed through the lens of financial stability, I see major benefits in a strong market-based channel of finance.
Nearly 50 percent of Texas public schoolchildren are Hispanic, but only 38 percent of high school graduates are Hispanic. Some 54 percent of non-Hispanic whites and 48 percent of non-Hispanic blacks age 18 to 24 with a high school degree were in college in 2008. The percentage of Hispanics was only 43 percent. Within the age cohort between 25 and 64, only 14 percent of native-born Texas Latinos have college degrees; 23 percent of native-born Hispanics in Texas age 25 to 64 are high school dropouts. No matter how you slice it or dice it, it is glaringly clear that Hispanics in Texas are failing at school. This must be corrected. If not, they will continue to trail in economic achievement. And all of us – white, black, Asian-American, Hispanic or non-Hispanic – will suffer the consequences of economic underperformance. Texas is a remarkable place. We embody the “can do” spirit. My favorite Texas historian is T.R. Fehrenbach. I recommend his book, Lone Star: A History of Texas and the Texans, to anybody who wishes to understand what makes this place unique.

in the product, services and labour markets, healthcare and social insurance systems etc. For Estonia the adoption of the euro is the only logical step and the overarching policy priority. In this context, we would like to emphasize that it is in the interest of the whole European Union that the Euro Area enlargement takes place in accordance with the clear set of well known rules while the criteria are applied, in line with the Treaty provisions, on an equal and economically meaningful manner. The countries joining should have a proven track record to fare well under the common monetary policy. This being the case, the Euro Area membership would fasten the catch-up process in these countries and strengthen the countries' ownership in the EU-wide macroeconomic co-operation at large. Macroeconomic stability and economic flexibility are prerequisites for the new Member States to ensure that investment in physical and human capital is sustained and outlays for research and development further increased. Higher growth and stronger policy coordination on the EU level will also strengthen the social dimension of enlargement. BIS Review 60/2006  1
That is designed to underpin incentives for banks to manage liquidity risk prudently, in the long-run interests not only of the banking system but of the wider economy. We have published a schedule for DWF pricing with those properties, structured around four broad classes of collateral, grouped according to their liquidity/risk characteristics. 17 We plan, after consultation, to introduce an auction structure for the wider-collateral long-term repo OMOs that delivers the same broad result of counterparties having to pay up to borrow against less liquid collateral. 18  16  The Bank published its general approach to collateral valuations when it disclosed use of the Special Liquidity Scheme. It stated: “Securities are valued by the Bank using observed market prices that are independent and routinely available publicly. The Bank reserves the right to use its own calculated prices, including where such independent market prices are unavailable. Those calculated prices are designed to deliver valuations taking account of securities’ contracted cash flows and yields of comparable securities, but not individual loan-byloan analysis of portfolios. To account for the risk that a calculated price is an over-estimate of what a market price would have been had it existed, an additional haircut is added. The Bank’s valuation of all securities is binding.” For more details, see the Market Notice for the Special Liquidity Scheme released on 21 April 2008. www.bankofengland.co.uk/markets/sls/index.htm.

The final brushstrokes entail developing tools that will, if applied, restrict the benefits accruing to nonresidents as a result of our having higher interest rates than our trading partners. The precise structure of this will come clear in the next few months, but possibilities include some form of taxation or a special reserve requirement. 2  Central Bank of Iceland Special Publication no. 4: Monetary policy after capital controls, December 2010 and Central Bank of Iceland Special Publication no. 6: Prudential rules following capital controls, August 2012. http://www.cb.is/publications/publications/special-publications/  BIS central bankers’ speeches  5  I have now reviewed the multiple crossroads that I mentioned at the outset. Each one of them poses a challenge for monetary policy. But it is not least the interactions among them and the timing that make monetary policy so unusually complicated at present. For instance, it would be much easier to cope with capital inflows if domestic economic developments did not call for a tighter monetary stance at this juncture. The oft-quoted Chinese blessing – or curse – “May you live in interesting times” – continues to follow us. Thank you. 6  BIS central bankers’ speeches
And the ECB worked with the Bank of England, the Federal Reserve and the Bank of Canada amongst others on a network of central bank swaps to make liquidity available in G10 currencies across a range of jurisdictions. The Bank of England’s initial response was not as comprehensive as that of the ECB, not least because its framework for providing liquidity lagged market developments. Once under pressure, the Bank could neither stabilise overnight rates nor support the banking system. Fortunately, in the jaws of the crisis, the Bank innovated rapidly and admirably to avoid the collapse of the system. In 2013, following the Winters review, we overhauled our facilities drawing on the ECB’s example and made it clear the Bank was ‘open for business’. Facilities were made cheaper, available at longer terms and  11  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  11  against a much broader pool of collateral. We also begun a broadening access to our facilities both within the banking sector and beyond it to reach central counterparties and large broker dealers. The most recent addition to the toolkit came in March of this year when the Bank launched a new Liquidity Facility in Euros (LiFE) as part of our Brexit contingency planning. This is backstopped by the swap line between our two institutions, and underpinned by our open communications and effective supervisory cooperation.

In the decade prior to the crisis, in both the euro area and the UK, inflation was low, stable and predictable. Inflation targets were achieved without causing undesirable volatility in output and employment, the so-called “divine coincidence”.1 Both regions experienced continuous expansions in activity. It is not entirely surprising that “end of history” declarations of the Great Moderation were increasingly commonplace. But such nominal stability masked growing financial imbalances and increasing strains in competitiveness. The financial crisis would expose how a healthy focus on price stability had become a dangerous distraction. Central banks had won the war against inflation only to lose the peace. When the music stopped, the consequences for the real economy were dire. In both the euro area and UK, output fell by around 6% and unemployment rates rose initially by 2½ percentage points. It took 7 years for GDP per capita to recover to pre-crisis levels. In response, the financial system and the institutional architecture have been fundamentally reformed. The capital requirements of large global banks are ten times higher than the pre-crisis standard. Liquid assets – 1  See Blanchard, O., and J. Galí (2007). "Real Wage Rigidities and the New Keynesian Model". Journal of Money, Credit, and Banking, 39(1), pp. 35-65. 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  relative to liabilities that can readily run – are also tenfold higher now than before crisis. We are ending too big to fail and transforming the resilience of financial market infrastructure.
What we learned as a result of this experience was, among other things, that years of historic data on fixed-income market yields and spreads could not have anticipated the size of the movements in credit spreads that in fact occurred in August and September. We also learned that markets that did not previously move together can suddenly do so, that trends that were under way for several years can abruptly come to an end, and that spreads that have been consistently narrow for years can suddenly widen. In the wake of these events, we have become all too aware that liquidity can be illusory – that individual traders may be able to exit a position when they wish but that not all traders can exit their positions at the same time. For many, these lessons have been humbling. Going forward, it is important to bear in mind that there most certainly will be further instances when the credit intermediation process is disrupted, when we will face other threats to the wellbeing of our market positions, our institutions and the global economy. These risks are in the nature of the intermediation process itself. As the global capital markets continue to grow and become ever more sophisticated – as I believe they will – what is most important for us as central bankers is to operate with a disciplined sense of priorities. It is clear that we as central banks cannot be responsible for any single bond holder, any single bank or any single financial institution.

The banks play a central role in financial stability as the majority of payments go through the bank system. The Swedish banks fund half of their borrowing through deposits from the general public and half of it through loans from one another and on the financial markets. If problems arise that prevent the banks from obtaining funding by borrowing from one another or on the financial markets, they can borrow from the Riksbank. The Riksbank is what is usually known as the lender of last resort. Figure 6 TED spread Difference between 3-month interbank rates and government security rates Basis points 500 450 400  500 Sweden Euro area USA  450 400  350  350  300  300  250  250  200  200  150  150  100  100  50  50  0  0  Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09  Sources: Reuters EcoWin och Riksbanken. 6  BIS Review 160/2009  During the financial crisis several financial markets ceased functioning. The banks’ confidence in one another declined and they became unwilling to lend to one another. Developments during the crisis can be illustrated by, for instance, the so-called TED spread, the difference between the interest on three-month interbank loans and three-month treasury bills. As confidence between the banks declined, the TED spread increased during the crisis and peaked when Lehman Brothers fell (Figure 6).
The meeting of the Heads of State and Government of the euro area, held at the Elysée Palace on 12 October, with the participation of the President of the ECB, provides Europe with a structured and coherent framework: •  possibility of recapitalising banks;  •  guaranteeing new medium-term bank debt (1-5 years), via, in France, a EUR 320 billion funding vehicle;  •  revisiting the accounting rules, with the recent reforms of the IASB – international accounting standard-setters – and introducing greater flexibility in mark-to-market accounting rules, allowing assets for which there is no longer a market to be valued at amortised historical cost. Moreover, the European Investment Bank will be mobilised to support European SMEs. Lastly, long-term discussions will commence on the best way to regulate finance and how it may better serve economic development. 2  BIS Review 129/2008  3. The position of French banks and credit  Our banks are not immune to the crisis. They have direct exposures, in particular through US monoline insurers. They have had to make sometimes substantial write-downs. They are also impacted indirectly by the seizing up of certain markets and the rise in their refinancing costs. That said, our banks are sound and profitable. It is worth recalling four facts that, in the current period of turmoil, are often overlooked: •  The solvency ratios of French banks are high, and much higher than the minima imposed by the prudential regulation.

5 de octubre de 2017  Presentation of the III Seminar in Economic History Banco de España Luis M. Linde Governor  Good morning and welcome to the Banco de España for our III Seminar in Economic History. The Seminars in Economic History organised by the Banco de España were launched three years ago, in 2015. The first one was held on the occasion of the retirement of Pedro Tedde de Lorca, who for many years was the member of the Directorate General of Economics and Statistics in charge of the Economic History programme and that, by the way, has been recently elected as a member of the Spanish Royal Academy of History. Last year, in October, we celebrated the second edition of the Seminar. The main purpose of these seminars is to bring together economic historians from academia and economists from the Bank to engage in research into economic episodes of the past with relevance for the economic problems of today. For many years the Banco de España has devoted substantial resources to research in economic history. This tradition goes back to the mid-1960s when a project was launched to publish, in one volume, a series of essays tracing the origin and development of the Banco de España, one of the oldest banks of issue, originally established in 1782 as “Banco de San Carlos”. The result was El Banco de España. Una historia económica and Ensayos sobre la economía española a mediados del siglo XIX, both published in 1970.