samchain/econo-pairs-v1 huggingface dataset:
At the Bank of England, we place a very strong emphasis on learning from best practice around the world. Given the transformative outcomes in the Chinese economy and fintech sector, for example the rapid growth of digital payments, we know there is a lot we can learn. It is for this reason that the Bank of England is engaging in dialogue on these topics through a programme led by our Centre for Central Banking Studies, supported by the UK government. The wider UK government is also engaging with China on fintech issues through the UK Government’s Prosperity Fund. The second priority is to leverage existing forums to promote global co-operation and co-ordination on technology issues. Regulators across the globe are not always going to agree on what technologies they want to use and how they fit into regulatory frameworks. However, global financial institutions for policy coordination such as the FSB, BIS and IMF provide important forums in which we can highlight concerns and work to find agreement where it exists. At the Bank of England we want to work with our partners to ensure we harness the benefits of technology in a way that maintains financial stability. And we want to work with our international partners to ensure fintech is supported by international cooperation, rather than creating new dislocation. We believe these goals are achievable and that if met, they herald the promise of a better finance for the people we serve, both in the UK and in China and globally.

Muhammad bin Ibrahim: Financial markets and the ringgit - our journey forward Opening remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Financial Market Association (PPKM) Annual Dinner "Financial Markets and the Ringgit: Our Journey Forward", Kuala Lumpur, 18 November 2016. * * * It is my great pleasure to address the members of the financial market industry at the Financial Market Association of Malaysia’s annual dinner. This dinner regularly held towards the end of the year, has developed its own unique tradition and camaraderie. Another year is passing by and we find ourselves in a very familiar situation; heightened volatility and uncertainty, low growth and low interest rates. The specificities or circumstances behind these may be different and indeed some of these developments were considered highly unexpected or even irrational. Hindsight, which gives us 20/20 vision, does not necessarily provide us with a better understanding. The global markets continue to be imbued with financial market and policy uncertainties. To add to this, are the evolving geopolitical uncertainties and challenges arising from Brexit and the impending changes following the recently concluded US presidential elections. 2016 is turning out to be a year of many surprises, something that policy makers tend to be uneasy with. I hope 2017 will bring less of these, but then for financial market players, surprises, volatilities and uncertainties are not totally undesirable as they also bring along lucrative trading opportunities.
Sweden had no inflation target; it had a fixed exchange rate that was defended through changes in interest rates. The exchange rate, rather than inflation in Sweden, acted as the anchor for monetary policy. The Swedish krona was pegged to currencies in countries with low inflation. However, it was not possible to generate confidence in this policy. The krona was devalued five times between 1976 and 1982, partly as a result of recurring cost crises. The large devaluation in 1982 was an offensive devaluation aimed at stimulating growth in the competitive sector. It assumed a tight fiscal policy to restrain domestic demand. During the 1980s both the credit and foreign exchange markets were deregulated, partly as a result of international developments. This was done gradually, but the credit market was formally deregulated in 1985 and the final parts of the foreign exchange regulations were abolished in 1989. Demand was high during the second half of the 1980s and the economy became overheated, resulting in high inflation, large wage increases and very large increases in property and share prices. Sweden’s competitiveness was undermined and finally the Riksbank could no longer withstand the speculation against the krona. In November 1992 the krona was allowed to float and it depreciated around 30 per cent in just a few months. The 1990s crisis was not merely a consequence of stabilisation policy failures. The situation was aggravated at the beginning of the 1990s by the tax reform – which stimulated increased saving – and an international slowdown in economic activity.

However, the Riksbank cannot affect the trend or the average for unemployment in the longer term. The fact that unemployment is higher now than it was prior to the 1990s crisis is essentially due to the factors I mentioned earlier, and not to monetary policy. However, the importance of monetary policy lies not merely in the possibility to influence through temporary changes in the repo rate. An essential part of monetary policy’s ability to stabilise lies in influencing inflation expectations so that they come close to the inflation target. A firmly anchored 2 per cent inflation target will affect price-setting and wage formation so that shocks - such as those we had during the "bridging over" policy years 1973-74 can be avoided. Once again: With regard to employment and unemployment, the most important measures must be taken outside of the Riksbank. What we can contribute is to conduct well-balanced monetary policy in line with the intentions of the Sveriges Riksbank Act, so that economic agents know what money will be worth in future. 5  6  These calculations can be made in different ways. Here the Riksbank has used an HP filter to calculate the trend. BIS Review 43/2006
The conclusion of this process and the launch in October of ISDA’s protocol to insert these fallbacks into existing contracts provides the means for LIBOR users globally to plug a glaring risk in their derivative positions.10  And they are doing so, in large and ever-increasing numbers. As of this morning, nearly 1,700 legal entities around the world had adopted the protocol – from huge global banks and corporates, to local building societies and property firms. The list covers all twenty of the largest traders in sterling swap markets by volume. And both LCH and CME, the world’s largest swap clearing venues, have committed to adopting the same measures in their own rulebooks. But there’s much more left to do. Derivative exposures are not just the domain of large banks – they also hedge real economy risks. It’s therefore encouraging to see big household names like Unilever and Tesco, Vanguard and Aberdeen Standard, among the early adopters. But we need to see this coverage expanded to much more of the investment community and to the non-financial corporates who use these markets, as well as completing sign up by banks. If your firm has not yet assessed whether to sign up to the ISDA protocol, or discussed plans with your trading counterparties, this should now be a top priority. And if you determine the protocol is not the right approach for your particular circumstances, you will need to make clear alternative plans to mitigate the risks.

We already have the essential ingredients – the presence of the world’s largest global players in our takaful market, deep Shariah knowledge within our domestic takaful and retakaful companies, and an entire Islamic finance ecosystem that can be tapped into to really push the frontiers in 2/6  BIS central bankers' speeches  building retakaful capacity. We just need companies that are willing to lead the way. Building this will take time, resources and a long term perspective, but this may be a small price to pay to build scale, generate critical mass and position takaful as a credible solution for large and specialised risks. There is also a big opportunity in halal trade facilitation, especially in serving SMEs. The global halal industry is valued at around USD2 trillion. The takaful industry however, has to be more committed and visible in serving local and international halal businesses. After all, takaful has its roots in the Nusantara, when Muslim merchants who plied their trade in the Far East centuries ago were protected by early forms of takaful. This is why the takaful industry must join the banking industry in participating at the upcoming Malaysia International Halal Showcase. Participation will indicate intent, non-participation reflects poorly on the takaful industry, showing the lack of commitment or ability to spot opportunities, or maybe even both. This certainly has to be addressed if the industry is to make any meaningful progress, this sort of things matter.
Since 2005, we have published a projection of the future path of our key policy rate. This path reflects our view on the role of monetary policy. We consider an interest rate path to be appropriate when it meets three criteria. First, the interest rate should be set with a view to stabilising inflation at our 2.5 percent target. Second, the interest rate path should provide a reasonable balance between the path for inflation and the path for overall capacity utilisation. This implies that inflation targeting is flexible. Notwithstanding new macroprudential tools, we see a need to add a third criterion: The interest rate should be set so that monetary policy leans against a build-up of financial imbalances. At Norges Bank, we remain firmly committed to our flexible inflation targeting framework. But the global financial crisis has taught us to be both modest and inquisitive. Experience with new macroprudential policy tools is limited, and institutional frameworks are still in the making. Leaning against financial winds remains subject to debate. It is therefore important that we actively seek knowledge. It is our obligation as central bankers to continuously search for the best practice for monetary policy. And we do not have to agree with Friedman's prescriptions to revisit the important questions he posed. We are privileged to have such a distinguished group of central bankers and academics present at this conference to help us with this task.

Luis de Guindos: Interview with El Mundo Interview with Mr Luis de Guindos, Vice-President of the European Central Bank, and El Mundo, conducted by Mr Pablo Rodríguez Suanzes on 25 November 2019 and published on 2 December 2019. * * *  How are you finding life in Frankfurt? Frankfurt is a nice city, I like it. The ECB is the most important institution in the framework of the EU, and of the euro area in particular. Exposure to the public is very different to when you’re in government. Here, the relationship is mainly with the European Parliament, through hearings, and with the public, through speeches. Is my life better? It’s different. How do you feel about not being able to speak as freely as before? I can keep speaking normally. I still attend the Economic and Financial Affairs Council (ECOFIN); each week, we have discussions in various forums on issues around monetary and economic policy and financial stability. So I have something to offer, but my contributions aren’t political. Do you miss it? I don’t miss anything. That was my job for six years. I’m not at all bored here. When and why did you decide you wanted to try to become the Vice-President of the ECB? I wanted to leave the government at the end of its first term. I spoke to President Rajoy and we said it could be a possibility, and it was very attractive to me. It’s the most important institution in the euro area, very prestigious.
The second challenge thrown up by digitalisation is the unbundling of the value chain. In the past, the value chain – from payment initiation, through authorisation and clearing to complaints processing – was largely concentrated in the hands of a single entity. Thanks to technical innovations, however, payment service providers are now unbundling and reconfiguring the value chain. For instance, they are taking the products of specialised providers – e.g. relating to FX transactions, payment guarantees or ‘mobile wallets’ – and combining them. Established providers of payment services are having to adapt to this unbundling. They are having to cooperate with new players, invest in their value chains and simultaneously satisfy demand for ever faster and easier payment methods. The central banks, too, face a challenge: they need to develop the core payment infrastructure in such a way that the unbundling of the value chain can be successfully navigated – without new risks being created. As a result, we are seeing many central banks adapting their RTGS systems. For example, retail payments are increasingly being settled via RTGS systems (something which for a long time was unique to Switzerland), longer operating times are being introduced and settlement times are being shortened. These are major international trends, and we in Switzerland will have to think about how we wish to position ourselves. There is also the question of how to integrate the new players – the fintechs – into the payments infrastructure.

Which digital challenges can the interested parties manage on their own? And where might shared solutions be beneficial for all concerned? Ultimately, we have a common goal: to maintain confidence in our currency. Against this backdrop, an efficient and secure payment system will be as critical as ever in the years ahead. Conclusion Ladies and gentlemen, the SNB has a mandate to facilitate and secure the operation of cashless payment systems. It fulfils this task by acting as commissioning party for the SIC system, and guiding the latter’s ongoing development in conjunction with the banks. In so doing, it creates the conditions at the infrastructure level for efficient, secure and future-proof Swiss franc payments. The SNB acts in the interests of all stakeholders in cashless payment systems in Swiss francs. To this end, we are engaged in active dialogue with both banks and non-banks. This evening, we have given you the perspective of the central bank, however it is important to hear other perspectives, too. So I am particularly looking forward to our panel discussion. The noted economist and author Jürg Müller will act as moderator. After the discussion, our panellists, Thomas Moser and I will be happy to take questions from the audience. I hope we can all continue these conversations during the drinks reception.
As you know, Spanish credit institutions have based a substantial portion of their business in the recent upturn on the granting of loans for housing development and purchases. And a large number of these loans have ultimately been repackaged as negotiable financial instruments by means of securitisation. These two phenomena are, as you all know, at the root of the problems experienced by certain credit institutions in other regions. But before drawing any insufficiently founded conclusions from this, we must bear in mind the differences between Spanish institutions and those beyond our borders that have been more severely impacted by the effects of the turbulence. As I shall explain, these differences are substantial and place Spanish financial institutions in a sound position to withstand these effects. The first and certainly one of the most significant differences lies in the fact that Spanish banks have kept the risks of the loans they have securitised on their balance sheets. The "originate-to-distribute" model followed elsewhere has not been developed at all in Spain and, consequently, credit institutions' incentives to value loan risks in a cautious and rigorous manner have not been weakened. Under these conditions, it is perfectly understandable why products like the US subprime mortgages, which triggered the current situation, have not emerged.

For the Swiss mortgage market, there is currently only a small risk of a credit crunch. On the one hand, there have been no widespread excesses on the Swiss property and mortgage markets recently, which makes it unlikely that banks’ appetite for risk will decline to any great degree. On the other hand, opportunities for loan refinancing in Switzerland remain strong. The structure of mortgage lending in Switzerland is quite varied, and for banks the “Pfandbrief” mortgage bond is a refinancing tool that provides continuing strong opportunities for loan refinancing, and has experienced something of a renaissance since the financial crisis. As such, the already muted outlook for the Swiss economy is unlikely to suffer any additional impact from a credit crunch on the property market. BIS Review 107/2008  1
These include crimes such as trafficking in drugs, women and children, as well as trading of illegal weapons. But there are more subtle forms of economic crime where authorities find it difficult to agree on the risks. In such cases, cooperation in combating such crimes would be more difficult. Examples of such cases are when bigger nations exploit the natural resources of smaller nations, which have been a practice for over 100 years since the days of colonization. Modern fortes of such crimes can be seen in cases where influential businessmen from large countries move into smaller countries under the pretext of technological advancement to exploit the latter's natural resources, which often are claimed for the mutual benefits of both parties. But it is clear that the allocation of such benefits is often not balanced. There is also a case of exploitation of consumers in smaller nations when products which are hazardous to health in bigger nations, have been relocated for production and sale in less developed nations. An example of this is tobaccos and cigarettes, which come under stringent restrictions on sales and advertisement in bigger nations but have been sold in other nations with highly persuasive but subtle advertisement campaigns aimed at teenagers and women. There are also cases of certain medicines which have been banned in more developed markets and yet can still be found on the shelves of other less developed markets. There is no way for the authorities of two nations to agree that such dubious practices constitute economic crimes.

It won't be a "cliff decision": a realisation phase will instead aim at preparing gradually and with experiments for a possible issuance by 2027. In a complementary manner, since 2020, the Banque de France and the BIS Innovation Hub have been conducting experiments on a wholesale CBDC, which attracts less public interest but has strong business cases. Today, I say this to commercial banks: don't be afraid! If a CBDC is needed and decided as a matter of public interest, don't oppose it. But participate actively in setting its designing, its parameters and mode of operation. There is no question of disintermediating existing or future private financial players. Money has for centuries been a positive and innovative partnership between public and private players. Notwithstanding our sometimes unwarranted old fashioned image, we central banks are keen to continue succeeding in our innovator's role with the private sector, not work against it. All economic agents need an anchor that guarantees the trust in the value of money, and central banks are the only ones fully able to preserve it. * ** To conclude, we are about halfway through a fascinating bildungsroman that has already offered many surprises, and will probably offer many more. As a committed reader and even stakeholder in this novel, I strongly hope that the plot overall unravels in the consistent way I described earlier.
Since 1900, the world’s equity markets have yielded a total return 120 times higher than the return on short-term government securities, bringing the average ERP to 5.7 percentage points per year.2] If we look at the period from 1970 to 2015, for which we have more complete data, the ERP is even higher. This cannot be explained by company fundamentals such as growth in earnings and dividends in this period, suggesting that market valuation of company profits has changed since 1970. Adjusting for the effect of this re-pricing, the long-term average ERP falls to just below 4 percentage points. Chart: Equity risk premium from different model specifications As we know, past performance is no guarantee of future results. In addition to using historical excess returns, the ERP can also be estimated using more forward-looking models. The most common approach is to estimate the ERP on the basis of current market prices and expected future dividends. We have analysed several different models of this type. On average, these models estimate an expected ERP of just below 6 percentage points. In all the models, the estimate is higher than it was ten years ago. The chart shows that model-based estimates of the ERP are uncertain and can change quickly. The estimates are particularly sensitive to assumptions for dividend growth and the risk-free rate. Growth in firms’ dividends has been particularly strong in the years since the financial crisis.

With this correlation, the tendency in the data is for bonds to rise in value when equity prices fall. Chart: Correlation between equities and bonds There has been a marked change in the correlation between equity and bond returns in recent years. In the period from the early 1960s to the end of the 1990s, the correlation between equities and bonds was positive. This trend has reversed. Since the beginning of the 2000s, the correlation between equities and bonds has generally been negative. This shift is clearly reflected in the chart, which is based on the correlations between US equities and bonds. The same shift is evident in the financial markets of a number of other countries. The decline in the correlation has received considerable attention in the financial literature.3 It has been suggested that this change may be the result of a shift in monetary policy in many countries 4/7  BIS central bankers' speeches  towards giving greater weight to stabilisation of the real economy in the face of supply side shocks. This means that there is now some divergence in response between equity and bond markets to this type of macroeconomic shock. This type of shock has also occurred less frequently in the past couple of decades. A lower correlation means that bonds reduce the risk associated with equity investments more effectively than earlier. Investors may thereby be willing to accept lower expected returns on bonds with long maturities.