samchain/econo-pairs-v1 huggingface dataset:
Several explanations for the crisis One usually says that the crisis began in 2007 with problems in the US mortgage market and that this gradually developed into a global financial crisis, which became acute in autumn 2008 in connection with Lehman Brothers filing for bankruptcy. But the picture is more complex than this. The origin and course of the crisis will be analysed thoroughly and we probably will not have a complete history of it until much later. However, we can already note that there are several explanations as to why the crisis arose and why it became so widespread. One circumstance that probably played some role is that growth had long been good in many countries, at the same time as inflation was low – quite simply, things had gone unusually well for an unusually long period of time. And when things have gone well for a long period of time it is probably human nature to relax and become slightly incautious. This is what appears to have happened this time in various ways and places, not solely in the US mortgage market. One factor that probably also contributed was that there was a global saving surplus that meant there were large capital sums to be invested in the financial markets. This surplus pushed down the interest rate on risk-free assets.

Without the measures taken by the Riksbank and other authorities the financial system would have ceased functioning and would still not be functioning. The same applies of course in many other countries. As we note in the Financial Stability Report that we published just over one week ago, these measures have contributed to ensuring that there is no imminent risk of a liquidity shortage for the banks. Interbank rates have fallen, although it still appears difficult to find funding at longer maturities. There are also other signs that the conditions on the international credit markets have eased somewhat and it appears to have become slightly easier to obtain funding by issuing securities, even when these are not backed by a government guarantee. Now it is unfortunately not the case that the problems are over – we are not yet on solid ground with regard to financial stability. There is still a lack of confidence between financial institutions and the international credit markets are fairly far from functioning as they did before the crisis. The situation is still sensitive and there is still a risk of a surprisingly negative shock giving the crisis new energy and once again making it more difficult for the banks to obtain funding. The Riksbank will of course follow developments very closely. We will continue to supply the banks with liquidity and we are prepared to do so as long as necessary. But to summarise briefly, the situation does look somewhat brighter with regard to liquidity risk.
Cœuré’s report – compiled over four months and published in October – provides a full assessment of the risks posed by stablecoins from a microeconomic viewpoint, in terms of anti-money laundering and consumer protection, but also from a macroeconomic one, in terms of financial stability. Within the framework of the Financial Stability Board (FSB), we are now preparing a coordinated regulatory response to these challenges, due to be published by next summer. I shall turn now to the second pillar of our response: supporting innovation to enhance our payment systems and meet the growing expectations of consumers. We first have to take advantage of the opportunities offered by the digital revolution to develop a genuine panEuropean payment solution. As Steve Jobs said, “innovation is saying no to a thousand things”. This observation sheds light on the challenge that European banks are about to face with the PEPS-I project (Pan European Payment Solution Initiative). I have every hope that they will be able to forces – and go beyond “national” practices – and rapidly propose a single, panEuropean payment solution, thus avoiding market fragmentation and the dominance of nonEuropean solutions. The Eurosystem will be ready to provide support as and when needed, in line with what we are doing to promote the use of TIPS (Target Instant Payment Settlement). As a market infrastructure capable of processing pan-European instant payments, TIPS could be used for the interbank settlement of transactions initiated via PEPS-I.

And extend it beyond the scope of the ACPR and the supervisory authority: I shall also speak as a central banker, and of a central bank digital currency (CBDC). Driven by new market entrants, the digital revolution has brought with it a wealth of advancements that we profit from every day: but it also raises major questions about bank intermediation, and even about our monetary sovereignty. I would like to propose today that we take a stark look at these questions (I), and that we answer them by reiterating the two main pillars of our strategy: safeguarding confidence and supporting innovation (II). I/ The advances and challenges associated with the proliferation of private initiatives in the payment industry Let us first recall the main trends that currently characterise the European payments market. The increasing digitalisation of cashless payments – which is leading to a sharp fall in cash usage in certain countries, from Sweden to China – has been driven by the rise of non-bank players. There is no denying that, today, the “centre of gravity” for payments is shifting towards these new players, especially the BigTechs. This displacement poses a challenge for banks’ economic model, but could also be a threat to European sovereignty insofar that the infrastructures, knowledge and technologies underlying it are largely owned by non-European corporations. The emergence, in parallel, of a new generation of crypto-assets is amplifying this disruption.
Of course we followed what they were getting up to very closely, and always stood ready to help when we were called upon by the markets to do so, as we occasionally were, intervening on our own initiative only to ensure that the public interest was properly respected. For the most part we took the view that market participants know better than we do what will work and what won't; it is after all their salaries if not their jobs that are on the line. Where public policy issues were involved, we established a tradition of extensive consultation right across the relevant sections of the market - a tradition which the FSA has certainly maintained. In the UK's relatively well-developed markets - particularly the wholesale markets - we recognised early on that where intervention was judged to be necessary - in the interest of market transparency or of prudential or behavioural conduct for example - it needed to be informed by those who properly understood the subtleties of the market if we were to reduce the risk of unforeseen consequences which could either frustrate the purpose of the intervention or unnecessarily obstruct market innovation. In some instances this approach, which I suppose might be described as market-sensitive, involved encouraging the market itself to address the particular issue in question as a preferable alternative to official action.

And they need rules that reflect public policy concerns, relating particularly in the case of financial markets to systemic stability, consumer protection and fair competition. I will come back to that. The second main driver of change in the financial services industry in particular is, as I say, the ICT revolution, which has made possible new financial instruments and investment strategies, new means of measuring, monitoring and managing risks and new - and cheaper - delivery, trading and settlement mechanisms and so on, all of which facilitate the greater competition and greater efficiency we need. These global influences are of course at work within Europe, like everywhere else. But change in Europe in particular is being driven also by two Europe-specific factors - the single European market program, which is essentially an advanced, regional, form of the broader international shift towards free trade and the freedom of capital movement; - and the introduction of the euro, which, by eliminating currency risk between the participating countries, is making a substantial further contribution to increasing the depth and liquidity of European financial markets, including the (small-E) euro markets here in London.
This unusual situation has precedent, for example, in Japan, where inflation expectations have remained stable, while inflation itself has lagged for a prolonged period. Of course, there is a risk, too, that inflation expectations themselves could fall–indeed, I would note that longer-dated TIPS break-evens have recently dropped to the lower end of their post-crisis range. Conclusion As I think about the process of normalizing policy, I conclude that today’s risk-management calculus says we should err on the side of patience in removing highly accommodative policy. We need to solidify our confidence that our ultimate exit from the ZLB will occur smoothly – and that our escape can be sustained. A corollary to this conclusion is that we should not shy away from policy prescriptions that imply forecasts of inflation that moderately overshoot our 2 percent target for a limited time. Such a policy strategy more properly balances expected costs and benefits. And it would leave me with much more confidence that inflation will not stall out below target once we start raising rates. I agree with Atlanta Fed President Dennis Lockhart in thinking that we ought to be “whites of their eyes” inflation fighters. 3 The last thing we want to do is regress back into the ZLB. Indeed, such a relapse would be a sign there was something else going on that was preventing the economy from being as vibrant as we thought possible. To summarize, I am very uncomfortable with calls to raise our policy rate sooner than later.

The rapid decline in global oil prices, drastic disruptive policy shifts in major economies, and the more recent increase in trade tensions are prime examples of tail-risk events that will continue to affect our economy and the ringgit. Similar to the Malaysian economy, while we have witnessed progress and growth of the Malaysian takaful industry, moving to the next level requires us to move away from status quo and to do things differently. Therefore I urge the industry to not waste any more time in thinking anew and strengthening its capacity to play a much more meaningful role in supporting sustainable and inclusive economic growth. Let us all be committed to realise the values that are fundamental to the benevolent mission of takaful. I would like to take this opportunity to congratulate tonight’s award winners. I am confident that such recognition will motivate you and all parties to continue to contribute and strengthen the growth of the takaful industry. Thank you and enjoy the rest of the evening. 6/6  BIS central bankers' speeches
The increase in housing prices now appears to have slowed down and they are roughly at the same levels as at the end of 2010 (Figure 1). Figure 1 Prices of single-family dwellings and tenant-owned apartments Index January 2008 = 100 130  130  Valueguard (single-family house) Mäklarstatistik (single-family house)  120  120  Valueguard (tenant-owned apartment) Mäklarstatistik (tenant-owned apartment)  110  110  100  100  90  90  80  80  70  70  60  60 05  07  09  11  Sources: Mäklarstatistik and Valueguard  13  One example of a fundamental relationship that changed suddenly was the drastic reduction in the right to make deductions for mortgage interest that were included in the tax reform at the beginning of the 1990s. The mortgage rate after tax increased drastically for many borrowers. Even the real interest rate increased drastically, despite the severe recession. This is something that one can hardly expect to happen within the current inflation targeting regime. 6  BIS central bankers’ speeches  Is household indebtedness sustainable? Opinions on this are divided, but allow me to begin by pointing out here that households have very strong balance sheets. Household debt in relation to disposable income, the debt ratio, has increased over several years and the debt ratio is now around 170 per cent of disposable income (see Figure 2).

The financial crisis 2008–2009 hit households in Sweden through a large fall in GDP, a rapid increase in unemployment and housing prices that fell by 10–20 per cent depending on which statistics you use (Figure 1). The euro crisis has recently entailed a new stress test. Swedish households and mortgage borrowers have also passed this test with flying colours. The Riksbank’s inquiry into the risks in the housing market also observed that resilience in the Swedish mortgage market was good. It estimated the effects on the economy of a fall in housing prices of 20 per cent and concluded that the effects would be relatively small, particularly if they are counteracted by a more expansionary monetary policy.19 One important indicator of sustainability and resilience is the household saving ratio. Swedish households’ saving ratio is now historically high, while it was very low prior to the 1990s crisis, minus 3 per cent at its lowest (Figure 2). A high saving ratio means that households are increasing their real and financial assets and that their consumption is not funded by loans. A low saving ratio and a loan-funded consumption boom, which was the case in Sweden prior to the 1990s crisis and in the United States prior to the most recent crisis, is on the other hand problematic and not sustainable.
Regarding private placements, market-led initiatives have already allowed the effective development of European common standards. The French financial industry has been particularly active in this field, with the development of a Charter for Euro Private Placement for France in 2014. This Charter has been re-used by the International Capital Market Association (ICMA) to elaborate a market guide on common market standards and best  BIS central bankers’ speeches  1  practices. These initiatives could leverage on a common European definition and classification of SMEs to develop a Pan-European Private Placements market. (ii) Second, market-based financing should be seen as a complement to, not as a substitute for, bank-based financing. It is essential to foster the development of market-based financing as a complement to bankbased financing. Although this process has already started, the speed and extent of the shift differ across countries and sectors. Even though a rebalancing of the European economy financing mix is a desirable outcome as it diversifies the available sources of funding, banks will still have a major role to play. Some segments of the economy, namely SMEs and infrastructures, heavily rely on bankfinancing, due to the existence of high fixed costs and significant information asymmetries. Banks are indeed better equipped to assess the credit-worthiness of such counterparties or projects. Having said that, clear and transparent information on credit risk is a prerequisite to the recourse to any source of funding, be it intermediated or not.

Benoît Cœuré: Investing in Europe – towards a new convergence process Speech by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at the Panel “The big rethink for a stronger Europe”, The Economist Roundtable with the Government of Greece, Athens, 9 July 2014. *  *  *  I would like to thank Lucas Guttenberg, Jean-Francois Jamet and Marion Salines for their contributions. I remain solely responsible for the opinions contained herein. Summary Economic and Monetary Union (EMU) is a political triathlon. It requires resilience and resolve to perform well at all times in the three disciplines of a currency union: fiscal policy, economic policy and financial policy. EMU is a team effort. Only if every participant performs well can the euro area team be strong. This is the most important lesson from the crisis. The European economy is undergoing a moderate recovery, but complacency would be unwarranted. To really overcome the crisis, there are some remaining major challenges still to be faced. The euro area is not in a financial crisis anymore, but it must still contend with high debt, low growth and unacceptably high unemployment. These are reason enough to remain alert and continue acting. In recent years, economic policy-making rightfully focused on re-establishing the most important necessary condition for growth: stability. For companies to invest, for firms to hire, for households to consume, a stable economic environment is tantamount.
Mohammed Laksaci: Impact of the oil price decline on the Algerian banking system Keynote address by Mr Mohammed Laksaci, Governor of the Bank of Algeria, at a meeting with bank executives, Algiers, 26 April 2016. *  *  *  I would first like to point out that in terms of external shocks, the Algerian economy, which is closely linked to hydrocarbon sector resources, has particularly suffered from the shock inherent to the sharp and sustained fall in world oil prices. It is therefore from this perspective that I start my presentation. I shall talk first of the macroeconomic implications of this external shock, before outlining its impacts from the perspective of financial stability, in light of the new challenges for the banking system in the financing of non-hydrocarbon growth. 1. Macro-economic stance  Economic and financial performance during 2001-2008, particularly the significantly improved external financial position and a substantial accumulation of budget savings, enabled the Algerian economy to demonstrate resilience in the face of the severe external shock in 2009 inherent to the intensification of the international economic and financial crisis. Following the strengthening of the external financial position over 2010-2013, Algeria continued to preserve monetary and financial stability during 2014, in a context of persistent fiscal deficit and a return to a balance of payments deficit. The impact of the oil price decline on the Algerian economy can be examined through the main recent economic and financial developments.

Impact on financial stability  Like other central banks, the Bank of Algeria faced the need to strengthen the surveillance of systemic risk, particularly in relation to the volatility of hydrocarbon prices in international markets and the interconnectedness of financial institutions within the banking sector. To address these concerns, banking legislation, as amended in 2010, has extended the central bank’s mandate to include the objective of financial stability. With this amendment, the financial stability mandate becomes of equal importance to the price stability mandate. In practice, it is worth noting that the contribution of monetary policy to monetary and financial stability in Algeria is crucial in view of the dominance of the banking sector in the financial system and its potentially important role in the development of financial intermediation. This contribution is of particular importance in the context of persistent excess liquidity in the money market since 2002. To strengthen the operational framework of financial stability, and following the introduction, in 2010, of new accounting rules of international standard, risk assessment rules with regard to new financial products and the introduction, in 2011, of new regulations regarding liquidity risk identification, measurement, management and control, the Council of Money and Credit (the monetary authority) promulgated in 2014 a new prudential framework to ensure conformity of the prudential rules to the new Basle norms and standards.
All in all, these factors clearly indicated that the repo rate and repo-rate path should be lowered in July (see Figure 11). As you know, I entered a reservation against the decision to cut the repo rate by 0.5 percentage points and advocated a smaller cut of 0.25 percentage points, and to wait until 2016 before making the first policy rate increase. There are several reasons for this. Firstly, I consider that the smaller repo-rate cut entails a better balance between bringing inflation up towards the target and taking household indebtedness into consideration. As I see it, there are also clear signs that economic activity is about to improve, and the conditions are therefore right for stabilising inflation around 2 per cent by means of a smaller cut in the repo rate. Moreover, the smaller repo-rate cut is more in line with our earlier actions, which was reflected in the market expectations of a 0.25 percentage repo-rate cut. I do not think one should surprise economic agents unnecessarily, and our actions should as far as possible be predictable and long term. I would like to emphasise that there is, on the whole, consensus among the Executive Board with regard to economic developments and monetary policy. As I have said before, it is a question of a difficult balancing act, and it is natural that there will be some minor differences of opinion on the assessments.

In addition to increasing the resilience of the banking system, higher capital adequacy requirements could also contribute to slowing down household indebtedness as the banks’ funding would become more expensive if they had to have more capital, which could lead to higher lending rates and reduced credit granting. However, further capital requirements of the magnitude now being discussed would have only relatively marginal effects on household indebtedness.10 At the same time, both household debt and housing prices are continuing to increase from already high levels, despite the fact that Finansinspektionen introduced a mortgage cap already in 2010. I therefore feel that further measures are needed to subdue household demand for credit. The Riksbank has proposed, for instance, the introduction of healthy minimum levels for the standard values used by the banks in their discretionary income calculations, which form part of their credit assessment of households. This means that a borrower should be able to manage certain minimum levels with regard to interest rate, amortisation rate on both first and last mortgages, as well as maintenance and general living costs. Examples of further measures that might have an effect on indebtedness are amortisation requirements, limits to loan amounts or interest payments in relation to income or a stricter mortgage cap. The question of measures to increase households’ amortisation of their loans was discussed by the Financial Stability Council in May.