samchain/econo-pairs-v1 huggingface dataset:
And they include importantly, too, an adaptive regulatory framework which has in fact been remarkably successful in maintaining confidence in financial institutions and markets without stifling innovation and risk-taking. All of these factors -- and no doubt others -- help to explain why some 600,000 people are estimated to be employed in finance and other business services in Greater London -- a number which I believe is roughly equal to the total population of Frankfurt. Now you will have noticed that none of these factors has anything to do with the question of the national currency used either here in the UK or in Continental Europe. The main impact of the advent of the euro on financial activity, as I see it, is that it will encourage the development of broader and deeper and more liquid markets, in financial instruments of all kinds, where they are currently fragmented because they are denominated in the various individual national European currencies. The City of London thrives on liquid markets regardless of the currency -- and it will thrive on the euro, whether the UK is “in” or “out”. Measured in these terms the introduction of the euro represents an opportunity for London rather than a threat. I have no doubt whatever that there will be a vigorous euro-euro market in London, come what may, just as there is a vigorous market in euro-DM or euro-francs as well as $ and euro-yen at present.

And, provided we do indeed operate within a co-operative framework, and provided we are indeed well prepared, the City has good reason to be optimistic. BIS Review 106/1997
The other option, described by Kohn as the “extra action policy”, allows for a deviation of current inflation from a level determined as stable in return for improvement of the perspectives of achieving price stability in the future. However, the extra action policy does not mean piercing the speculative bubbles by central banks, and means rather “taking out” of additional insurance against possible negative shocks, which may happen in the future. In Kohn’s opinion, the extra action policy may be run very rarely and only where the three conditions are met: •  the central bank must be able to identify asset bubbles in a timely manner and high certainty as to the correctness of analysis conclusions;  •  there must be a high probability that a slight tightening of the monetary policy will be able to stand against the speculative activity on a given assets market;  •  the expected improvement of the future economic situation resulting from a smaller speculative bubble must be significant and higher than the costs incurred by the economy in the aftermath of running the extra action policy. To recapitulate this train of thought, Kohn was very sceptical whether the three above-mentioned conditions can be sufficiently met; however, he did not preclude that in the future, the understanding of economic processes will improve as much as to enable running the extra action policy where reasonable.

In essence, this is what the ECB has been doing through its “monetary analysis”, as a key rationale for its close monitoring of money and credit aggregates has precisely been to keep track of the evolution of medium-to-long-term tail risks which simply do not map onto the central projection for inflation. Let me now turn to another lesson of the crisis, namely the practical relevance of the zero lower bound for monetary policy purposes. II.4. The zero lower bound is a relevant issue for contemporary monetary policy  For many years before the crisis, the general consensus within both academia and the central banking community had been that the zero lower bound (henceforth, ZLB) and the associated problem of the liquidity trap, in which conventional monetary policy – that is, the one associated with setting short-term interest rates – all but loses its ability to impact upon the economy, were issues of mainly historical interest. Japan’s recent experience with the ZLB, and its difficulty in extricating itself from a liquidity trap situation, presented a troubling counter-argument to this position, but that could be “explained away” as the result of a series of policy mistakes on the part of Japanese policymakers. As a consequence of the financial crisis, there is, today, a generalized recognition that the ZLB may be a much more significant problem for monetary policy than previously thought.
The Rt Hon Sir Edward George: Report on the state of the UK economy Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, at the Chartered Institute of Bankers in Scotland Biennial Dinner, Glasgow, 20 January 2003. *  *  *  Mr President, My Lord Dean, my Lords, Ladies and Gentlemen, May I begin, Mr President, by thanking you and the members of the Council for your great kindness in conferring the Honorary Fellowship of the Institute on me this evening. I very much appreciate the honour it represents - and it is indeed a great honour for a sassenach. But even more than that, for me it symbolises the broader - and very longstanding - fellowship between the Bank of England and the banking community here in Scotland - a fellowship, and indeed a friendship, which I myself have so much enjoyed ever since I first began my regular visits here over 25 years ago. As I move towards my retirement this evening will serve as an enduring reminder of the warm personal and professional relationships - with the bankers in Scotland, including many of you here this evening - that I have been privileged to develop over that time. And I will wear your - in fact I can now say our - splendid new tartan with both pleasure and pride.

This is the fifth occasion in just the past eight years on which I've had the pleasure of giving this biennial report on the state of the UK economy to our Scottish stakeholders. On each previous occasion I have been able to report to you relatively steady growth of overall output, a continuing fall in unemployment and stable low inflation. But I've then gone on to discuss the risks and uncertainties ahead and to worry out loud as to whether or not we could keep it up. On each occasion I have concluded - usually somewhat tentatively - that we could. And indeed we have in the UK - as a whole, though I have to admit it was a close run thing last winter in the wake of the unexpectedly sharp economic slowdown that hit the whole of the industrial world from the beginning of 2001. Despite that global economic shock - which produced near-simultaneous recession in the world's three largest economies, the US, Japan and Germany - we in the UK - at the overall, aggregate, level have now enjoyed continuous quarter by quarter growth at an annual average rate of 2¾% throughout the past 10 years. That is far and away the longest period of consecutive quarterly growth since quarterly estimates began nearly 50 years ago - and the annual average growth rate has remained somewhat above most estimates - at least until recently - of the longer term trend rate of some 2¼% - 2½%.
However, the ECB considered it important that the European Green Bond Standard becomes the prime green bond standard within the Union and that it is necessary to make the standard mandatory for newly issued green bonds within a reasonable time period. This would create certainty for markets and could also incentivise issuers to apply this European standard before it becomes mandatory. In view of the voluntary nature of the European Green Bond Standard, its success will depend: first, on whether issuers adopt it, bearing in mind that the requirements could be stricter than under other private standards in the market; and, second, on whether investors will be interested in the bonds issued under this new standard. Given that the regulation requires taxonomy alignment, a higher level of disclosure and external review, investors may consider their quality higher and have greater interest in including them in their portfolios. Thus, investor pressure could boost the use of this standard. Green bonds have been subject to criticism based on the fungible nature of money and the risk of green-washing. In 2021, a study published by the Bank for International Settlements showed that the issuance of green bonds was not leading to a much greater reduction in companies’ carbon footprints, when comparing with companies that did not issue green bonds. This is because of the inherently fungible nature of money. Funds raised with green bonds free up resources that could be used for investments with a larger carbon footprint.

Public debt in the major advanced economies is now as high, as a share of GDP, as it was after the Second World War, when high military spending had been financed by borrowing. (See Chart: Government bond yields.) In late autumn 2009, fears arose in financial markets that some countries would be unable to pay their debts. The unrest was triggered when Greece announced that its public finances  BIS Review 123/2010  1  were in poor shape. Government bond yields rose markedly in Greece, Spain, Portugal and subsequently Ireland compared with German bond yields. Sovereign credit ratings were downgraded and the price of insurance against sovereign debt default soared. (See Chart: Credit risk on sovereign debt.) Sovereign debt has been regarded as the safest form of investment in advanced economies since the Second World War. Until recently, sovereign risk premium differentials in Europe have been small. This has changed. It now costs more to insure against a sovereign debt default by Spain and Italy than to insure against default by Latin American countries such as Brazil and Mexico. (See Chart: Bond yields.) States in southern Europe also have to pay higher interest rates than sound private borrowers in the euro area. There are also examples of states paying higher interest rates than the soundest of private borrowers in the same country. In spring 2010, Greece encountered acute payment problems.
Needless to say, such reconciliation cannot and must not be “imposed” by foreigners who do not carry the burden of being responsible to the Sri Lankan people. As every Sri Lankan living in the country would readily acknowledge, Sri Lanka’s overall objective in defeating terrorism was not only to win the military battle, but also to place the country firmly on a sustainable path of peace, prosperity and growth for all of its people. For that objective to be achieved, Sri Lanka must follow its own time frames and priorities, and if need be, challenge conventional wisdom as proposed by outside parties, however wellmeaning their intentions may appear to be. BIS central bankers’ speeches  3

Commentators have, indeed, been emphasising that CCPs are becoming systemic. To my own way of thinking, they have already been systemic for the markets they clear for a very long time. Three clearing houses have failed in recent decades. In 1974, the Caisse de Liquidation failed in Paris, due to default on margin calls when sugar-futures prices fell sharply. In 1983, it was the turn of the Kuala Lumpur Commodities Clearing House, when half a dozen large brokers defaulted following a crash in palm-oil futures. And, most dramatically, the Hong Kong Futures Exchange clearing house failed in the wake of the global stock market crash in 1987. The effects were devastating. The Futures Exchange had to close. Traders had hedged margin-financed cash equity positions in the futures market. They faced margin calls on their cash positions but, with the futures market closed and the clearing house bust, they  1  “The role of margin requirements and haircuts in procyclicality”, Committee on the Global Financial System, March 2010. 2  BIS central bankers’ speeches  could not get margin moneys returned on their profitable futures positions. For that and other reasons, the stock market closed too. The upshot was that Hong Kong’s main capital market shut down. Reopening the market was no small feat. World markets had fallen further in the meantime, so there was a risk that a modestly “recapitalised” Clearing House would go broke again if positions had to be marked down immediately.
Earlier this year, I augmented these regional visits with a “Townhall Tour”, partnering with charities, citizen and faith groups to engage with new sets of people across the whole of the UK. These are, by design, listening events. The main messages are captured in my blog and animations and photos from each of the events. 49  The Townhalls have made clear to me the benefits of asking open questions, uncontaminated by priors and prejudices. They have taught me a lot about the economic and financial issues that really matter to people, only some of which are captured by economists’ theories and surveys. They have underlined for me the 47  Whittaker et al (2017), for example, found that patients were willing to wait longer for an appointment with a doctor with good listening skills. 48 Holmberg and Thelwall (2014). 49 Available from the Bank’s website at http://www.bankofengland.co.uk/Pages/outreachevents.aspx 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  benefits of harnessing non-expert opinion when it comes to understanding the economy. And the Townhall visits, while not making me a super-forecaster, have thereby hopefully made me a slightly less bad one. These Townhall visits are also an eye-opener for anyone in any doubt about the importance of the economy and economic policy to the everyday lives of most people. When someone tells you that a higher cost of living is, for them, the choice between heating and eating, it makes everyday economics real. It makes the MPC’s concerns about rising inflation concrete.

Turning to economics, the educational pyramid could not be more different (Figure 2). It is more diamond than pyramid. Economics is not a compulsory part of the school curriculum at any stage. Up to age 16, economics forms only a very small part of PSHE (Personal, Social and Health Education), a voluntary part of the curriculum. Surveys suggest that PSHE provision is patchy and has decreased significantly in recent years. 56  Among early-years children, there is little foundation for learning everyday economics. 57  Beyond 14, students at some schools can opt to study economics. In practice, only around a third of schools offer this option. As a result, in 2016/17 only just over 9,000 students across the UK studied GCSE economics, typically between the ages of 14 and 16. That is a tiny 1.4% of the student population in that age range. These numbers have been flat over the past decade. More than a decade into their educational lives, then, the vast majority of students have had virtually no exposure to economics and business. Beyond age 16 the number of schools offering, and students studying, economics picks up - the pyramid begins to widen. Around 33,000 students completed A-Level economics in the UK in 2016/17, typically studying between the ages 16 to 18. Encouragingly, these numbers have swelled, by around 70%, over the past ten years. That remains only 4.3% of the total number of young people in this age range.
This is the main reasoning behind the strengthening of our forward guidance, which we reasserted yesterday at the Governing Council. We now foresee that the ECB’s floor rate will remain at its current level of -0.5% or lower, until there is a lasting convergence in the inflation outlook towards a rate that is sufficiently close to, but below, 2%. The low interest rates, and even the negative interest rates, are nothing new: what  Page 3 of 6  is new is that the low interest rates are going to continue, and have to continue, given the global economic cooldown. The current low interest rate environment also has positive effects that must not be underestimated. If the ECB had not acted to bring down interest rates and purchase assets, there would have been between 1 and 1.5 percentage point of inflation less in the euro area during the 2015-18 period, but above all there would have been less growth (of approximately 2.5 percentage points) and fewer jobs in France and Europe. The insurance profession, like banks, benefits from this improved economic environment. Since 2013, the euro area has created 11 million jobs. Mario Draghi, whose term comes to a close next Thursday, has been far more than a great ECB president. He has been a great servant of Europe. B. This low rate environment calls for vigilance and adaptation Nonetheless, and this is an undeniable fact as it is mechanical, low rates are putting pressure on European insurers’ SCR coverage ratios.

1987-2003 10  10  8  8  6  6  4  4  2  2  0  0 1987 1989 1991 1993 1995 1997 1999 2001 2003  SG CME 08.06..2004  Source: Statistics Norway  2  The exchange rate remained stable up to autumn 1996, partly because wage growth was low and overall demand did not generate pressures in the economy. Gradually, the krone began to show wider fluctuations. The experience of the last half of the 1990s demonstrated that monetary policy cannot fine-tune the exchange rate. Developments in international financial markets led to more pronounced fluctuations. And more fundamentally, exchange rate developments no longer provided signals to wage formation and fiscal policy when labour market pressures mounted and incomes policy failed. High petroleum revenues, fiscal slippage and expectations of increased use of petroleum revenues contributed to this. Hence, the exchange rate was no longer appropriate as a nominal anchor. Norges Bank therefore placed increasing emphasis on low and stable inflation. A formal inflation target for monetary policy was introduced in the spring of 2001. The mandate for the conduct of monetary policy is provided for in the Regulation on Monetary Policy, issued by the Ministry of Finance on 29 March 2001. The operational target of monetary policy as defined by the Government is inflation of close to 2.5 per cent over time. The idea of an inflation target for monetary policy was not new.
Thus, while the overall impact on businesses stands at slightly over 2 pp, it is expected to top 5 pp in the three most affected sectors.22 For households, given that energy expenditure accounts for a larger proportion of the consumption of lower-income households, the price rises seen in 2020 and 2021 will hit this group the hardest. More broadly, the Financial Stability Report also sets out the results of banking industry stress tests for two potential stress scenarios (dubbed “adverse” and “severe”) for the period 2022-2023. The use of this type of extreme scenarios, which are plausible but have a relatively low probability of occurring, is consistent with the goals of prudential regulation, which require that banks have sufficient capital to absorb unexpected losses. The adverse scenario simulates an increase in energy prices in addition to that seen in early 2022, and a greater persistence of international trade bottlenecks. The impact on prices would accelerate the monetary policy response, while also entailing a worsening of financial conditions. Meanwhile, under the severe scenario, the price shocks are slightly more significant than under the adverse one, while including a more marked worsening of households’ and firms’ confidence, triggering further falls in the main domestic demand variables (consumption and investment). 21  Specifically, increases of 22% and 25% in average price levels for 2022 and 2023, compared with the price used in the December projections.

In the first half of 1973, the global economy is in full expansion. The preceding few years have been marked by mounting inflationary pressures (Chart 1). Norges Bank  Economic perspectives 2023  2  Chart 1 High and variable inflation in the 1970s Consumer prices. Four-quarter change. Percent 16 OECD Norway  14 12 10 8 6 4 1973  2 0 1966  1971  1976  1981  1986  Sources: Statistics Norway and Norges Bank  In Norway, too, prices are rising quickly. “Price problems”, as they are called, are a source of political concern. In summer 1973, the Price Problems Commission, headed by Deputy Governor Hermod Skånland, presents its report. The commission recommends closer cooperation between the authorities and the social partners to bring inflation under control. But the recommendation is not immediately followed.1 The price problems prove to be much worse than feared. On 6 October, war breaks out in the Middle East. The war is not only fought with military weapons, but also with economic weapons. The Arab OPEC countries impose an oil embargo on the major industrial economies in response to their backing Israel. Oil prices nearly quadruple. Petrol prices not only soar, but there are petrol shortages. Those of you a few years older than I am may remember the Norwegian ban on weekend driving. The following year, consumer prices in Norway rise by more than 10 percent, triggering a price wage spiral.
Rather in the best traditions of central banking, my conclusion is that the authorities as a whole need to remain vigilant and deepen our understanding, so that we can take appropriate action in the future if required – be that from a macro-prudential or supervisory perspective. Looking to the future  Financial markets are ever in a state of flux. In particular, the trend toward greater automation of trading – my focus today – looks certain to continue, both in already fast markets as well as those currently more reliant on traditional intermediation methods. Market participants have a clear interest here in understanding how risks to their businesses are evolving and in managing them prudently. For the authorities, we need to dig deep to understand what this means for the financial system as a whole: both to appreciate the benefits and to remain vigilant as to the risks. This remains very much in focus for the Bank and the FCA. It is important for us to ensure that regulation – both of individual participants, market infrastructure and the financial system as a whole – keeps pace with the changes in the type and distribution of risk. Only then can it provide an adequate guard against risks to prudentially regulated institutions and their counterparties. Regulation is most effective when informed by a rich and diverse set of research – and here we need help from the academic community. There is enormous potential for varied and interesting research in the area of fast markets.

The potential vulnerability of critical nodes in fast markets  Finally, it is unclear whether we yet fully understand how the migration towards fast markets has changed the nature or location of critical nodes within the system, and the risks to which they are exposed. Any intermediation model relies upon a particular infrastructure and has critical nodes. Traditional over-thecounter (OTC) markets, for example, are critically dependent on the willingness of dealers to warehouse risk in return for the informational advantage that seeing the flow provides. Such frictions have started to take new forms in fast markets. In particular at the same time as highfrequency trading activity has increased, a number of banks have stepped back from acting as market makers and have assumed a more infrastructural role. But new market participants still rely on banks to provide market access and extend them credit when engaging in algorithmic trading, through banks’ prime brokerage and clearing businesses. Providing a competitive service to such technologically advanced clients – particularly those trading at very high frequency – requires substantial investment in technology and infrastructure, including that to facilitate the real-time monitoring of exposures and risk management. The costs associated with this are high, and serve as an effective barrier to entry. As few banks provide these services, this leads to a concentration of nodes of market access for short-term liquidity providers. The changing role of banks/dealers in fast markets prompts the question whether the nature of potentially disruptive risks is also changing.