samchain/econo-pairs-v1 huggingface dataset:
In that case it could be worth discussing a comeback for the tolerance band, but reintroducing the band would neither contribute to higher inflation expectations nor consequently to a rise in interest rates. Monetary policy cannot solve the problem of rising debt and housing prices What can be said then about the growth of household debt and housing prices? After all, one issue central to the criticism is that the low interest rate contributes to further increases in debt and housing prices. 13  The Riksbank (2010). 14  For example, Heikensten and Vredin (1998, pp. 585-586) noted that "A tolerance band could be a reflection of the fact that the central bank does not consider it important to aim for an inflation target in the middle of the band. Instead it may, as long as inflation is contained within this band, want to focus on achieving other targets, such as production or employment for example. This is portrayed at times [...] as "opportunistic" monetary policy. We do not feel, however, that this was the reason certain countries chose to put a tolerance band around their inflation target". 8  BIS central bankers’ speeches  It has been obvious to those who have followed the monetary policy debate that the Riksbank shares many people’s concerns about this development. This is clear from reports, minutes, speeches and a number of debate articles. The Riksbank has therefore pointed out the necessity of measures in other policy areas for several years.

For example, if you look at my preferred measure of underlying inflation, called trimmed-mean inflation—which removes the most volatile price movements—it’s been running at 2 percent. This measure of inflation hasn’t shown any signs of trending up or down. That said, I will be watching developments closely for signs of a persistent shift away from our 2 percent long-run goal. As I mentioned, the economy started the year with a lot of momentum. But there are reasons to believe that the surge in growth won’t persist through the remainder of the year. Taking into account of all the indicators we follow, I anticipate a step-down of economic growth, from the 3 percent growth recorded last year to a still-solid pace of about 2-1/4 percent in 2019. 1/2  BIS central bankers' speeches  This is good news. It’s above the economy’s underlying potential, but not unsustainably so. Healthy economic growth should in turn fuel solid job gains, higher wages for workers, and some further declines in unemployment. The strong economy and labor market should also support inflation returning to 2 percent, the Federal Reserve’s long-run goal. The Global Picture In addition to the positive data we’ve been getting for the U.S., we’ve also seen encouraging signs that risks from global economic and financial markets are abating. Last year there were worries that the global growth slowdown centered in China and Europe would spill over onto our shores. This was one factor contributing to a more downbeat assessment of U.S. growth and the stock market sell-off.
Until the early 2000s, energy consumption in the advanced OECD economies and in the non-OECD developing and emerging market economies rose at a similar rate, with the OECD economies accounting for the majority of demand. In the wake of the strong growth in the 2000s, this position has been reversed with the non-OECD now the dominant contributor to world energy demand. For example, China’s share of global oil consumption has risen from 6% to 11% in the past decade alone.4  4  6  International Monetary Fund (2011)  BIS central bankers’ speeches  Chart 6 – Global primary energy consumption Million tonnes oil equivalent 6500 OECD  6000  Non-OECD 5500 5000 4500 4000 3500 3000 2500 2000 1980  1983  1986  1989  1992  1995  1998  2001  2004  2007  Source: BP Statistical Review 2010 This pattern of upward pressure on energy and commodity prices has been particularly noticeable since the mid-2000s and it has had a significant influence on inflation in many countries – particularly affecting the prices of goods. The so-called “China effect”, through which the shift of production to low cost countries held down the prices of global manufactures and traded goods in the late 1990s and the first half of the 2000s, has given way to a period of higher global inflation, driven by rising energy and commodity prices.

As a result, economies which are very open to international trade and business like the UK are likely to have to live with more economic volatility than we would ideally like.6 Implications for monetary policy So, let me sum up my analysis so far. I have identified three potential challenges arising from the “New Global Economy” which is shaping the world of modern business and having such a powerful influence on open international economies like the UK and Jersey. The first is a shift in the centre of economic gravity in the world economy towards Asia – which is likely to become the dominant region in the world economy in the first half of this century. That creates market opportunities for other economies as well as competitive threats, and is likely to result in further structural change as businesses adjust to changing patterns of demand and supply. Supply-side policies – focussing on skills, enterprise and innovation – are the key to maintaining growth and employment in the face of these structural adjustments. The two other challenges I have identified – a prolonged period of upward pressure on energy and commodity prices climate and an increase in global economic volatility more generally – have more significant implications for monetary policy in an open internationally focussed economy like the UK. So how should monetary policy respond? 6  See Sentance (2009a) and Sentance (2009b) for a more detailed discussion.
I hope this brief remark has been useful. Again I want to thank the Australian-Thai Chamber of Commerce for the invitation. Thank you. 2  BIS Review 101/2010

And because if our common initiative is not sufficient to reach a European decision – indeed there are other countries and the Commission around the table –, it is nonetheless a prerequisite: without the Franco-German engine, the European car will remain at a stand-still. The projects for a better Europe must be chosen with care and prioritised; and we mustn’t just talk about them. We must ensure that we have the actual means, through efficient governance, to achieve concrete results. To put it briefly: little, well, until the end. There are naturally some non-economic areas such as defence, border security, climate change and youth education and training – an Erasmus-pro programme should be a priority to put an end to the tragedy of the unqualified and unemployed youth. But, as regards economic matters, much also remains to be done. As Helmut Schmidt repeated frequently, we must build economic union as well as monetary union. To my mind, we need to make headway on two projects. 2/3  BIS central bankers' speeches  The first project, to be started immediately, is a “Financing Union for Investment and Innovation”. The European Commission launched the Juncker investment Plan and Capital Markets Union, and Banking Union is now underway. But it is now necessary to make these initiatives converge, in the interest of European savers and firms. Europe needs a better sharing of private sector risk, in order to channel its abundant savings more effectively towards productive investment.
So what evidence do we have on these three characteristics in real financial networks? Charts 1-3 look at the evolution in the international financial network. In particular, they look at cross-border stocks of external assets and liabilities in 18 countries at three dates: 1985, 1995 and 2005. These data can be used to gauge the scale and evolution of interconnectivity within the global financial network. In Charts 1-3, the nodes are scaled in proportion to total external financial stocks, while the thickness of the links between nodes is proportional to bilateral external financial stocks relative to GDP. 13 Table 1, meanwhile, provides some summary statistics for the international financial network, in particular measures of the skew and fat-tailedness in the degree distribution and its average path length. Three key points emerge. First, it is clear that the scale and interconnectivity of the international financial network has increased significantly over the past two decades. Nodes  8  May (2006). 9  Pröpper et al (2008). 10  May and Anderson (1991), Porterie et al (2008). 11  Watts and Strogatz (1998). 12  On the former see Albert et al (2000); on the latter see Porterie et al (2008). 13  Specifically, nodes are scaled by (Total External Assets + Total External Liabilities) for each node, and links between nodes i and j by (Total External Assetsij + Total External Liabilitiesij )/(GDPi + GDPj). The data are developed and analysed in Kubulec and Sa (2008). 6  BIS Review 53/2009  have ballooned, increasing roughly 14-fold.

Possibly, the number of authorities involved could be reduced somewhat if the mandate is based on an agreement between only the directly involved countries. At this point, it is however not very clear how such a contract could be made legally binding. Although solutions that are adapted to a specific situation are better than no solution at all, I am sceptical as to their practicability in a dynamic world. They have the same basic flaws as the model of home country lead supervision. In a constantly transforming banking landscape, relevant jurisdictions will change when principal ownership is transferred from one nationality to another. That’s why I also don’t believe in so called regional solutions. A third way, and in my opinion the most logical step in the long run, would be to focus some authority on a European level to deal with the relatively limited number of most important cross-border banks. Supervision of these banks would in my opinion benefit from the establishment of a European financial supervisor. Some opponents of this idea have claimed that proximity might then be lost, and a European supervisor wouldn’t receive enough knowledge about the markets where the institution operates. To my mind, this is not a very convincing argument. First, this problem is no less in the home-host model. Second, it is an organisational problem that can be solved. An EU supervisor would certainly employ staff from all EU countries and have local offices in the national financial centres.
23 In his book, Bernanke describes it as follows: after the June FOMC meeting, investors’ “conclusion, despite the  plain meaning of what I had said at the press conference, was that we were signaling an earlier increase in our federal funds rate target. They sold their Treasury securities and mortgage-backed securities, driving up longerterm interest rates.” 24 Stein, Yield-Oriented Investors and the Monetary Transmission Mechanism, September 26, 2013. 25 This description is drawn from Soros, Fallibility, Reflexivity, and the Human Uncertainty Principle , Journal of  Economic Methodology, January 2014. 15 / 15  BIS central bankers' speeches

Eddie Yue: Financial markets in Asia - turning challenges into opportunities Speech by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the International Swaps and Derivatives Association (ISDA) 34th Annual General Meeting, Hong Kong, 10 April 2019. * * * Thank you for inviting me to speak at the ISDA Annual General Meeting. For those of you coming from overseas, let me welcome you to Hong Kong and the very dynamic Asian region. By now, I hope you have experienced and enjoyed the vibrancy of the city. Indeed, this same vibrancy runs through Asia, which has got strong economic momentum with a promising outlook. But as central bankers, our job is to be on the lookout for future challenges and how to overcome them. So today I’d like to start by outlining two near-term risks on my radar screen, and then discuss two longer-term challenges for Asia. I would then offer some thoughts on how financial sector developments, including a lot of the efforts that ISDA has been involved in, can help overcome these challenges. Challenges for the Asian Economies Asia has seen remarkable economic growth over the past several decades – its GDP, on a purchasing power-adjusted basis, now accounts for more than 44 percent of global output, up from just 30 percent in year 2000. Living standards have improved dramatically, and per capital income has more than tripled over this period.
Of course, it is arguable that the search for yield in riskier assets is due in part, no doubt, to the historically low interest rates and abundant global liquidity, partly a result of recent expansionary monetary policy around the world. This has encouraged greater risk-taking, resulting in a substantial reduction in risk and liquidity premia over the entire maturity spectrum. On the other hand, however, low risk premia could also reflect changing risk appetite. More importantly, it is unclear whether this change in risk appetite has arisen from permanent or transitory factors. I make this distinction because permanent factors would imply that this reduction in risk premia is here to stay. Transitory factors, on the other hand, imply that the risk premia would rise once these factors reversed. Let me try to identify some of the permanent factors that have resulted in the shift in risk appetite and preferences. These include, firstly, changing demographics. The aging population has led to a larger volume of pension funds, which need to seek higher returns in emerging market assets. Secondly, technological advances, such as the IT revolution and decline in costs of telecommunications and transportation, have substantially lowered costs for cross-border financial transactions. Thirdly, changes in exchange rate regimes and capital account liberalization over the years have lifted many of the previous obstacles to crossborder financial transactions. Fourthly, financial innovation has made credit risk transfer mechanisms more widely available, increasing the appeal of riskier assets.

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It is essential that the industry keeps considering the issues and expressing its ideas, but I am afraid that unrealistic expectations can only lead us to an agonised debate which could polarise views and even hinder the progress that we need to make now in the crucial and urgent work of implementing Basel II, and international accounting standards. As I mentioned earlier, these were the more prudent principles that I wanted to mention. But, as the 19th century English writer Charles Caleb Colton said, “there is nothing more imprudent than excessive prudence”. Therefore, let me add a further four principles that go more in a more progressive direction. Firstly, I think that the EU needs to be ambitious, and set an example. I am convinced, and have said in many of my recent interventions, that the EU can and should go further, deeper and faster than the wider international community in finding greater consistency, convergence and efficiency in banking supervision. We should especially take advantage of the opportunities presented by Basel II and the fact that we already have a body of single market legislation and a long history of supervisory cooperation on which to build. And if we can demonstrate that progress is possible among 25 countries that are still rather diverse, others will have more confidence to push ahead also. Secondly, we should recognise the legitimate concerns of the industry. More efficient supervision is a necessary - although not sufficient - condition for a more integrated market.

There is no need for me to explain the dichotomy that arises when we have, on one hand, an industry that is becoming increasingly internationalised in nature and, on the other, a supervisory framework that remains predominantly based on national responsibilities and accountabilities. In a context where banking groups increasingly take decisions and manage risks on a global basis, inconsistencies or differences in the regulation and supervision across the countries in which they are active may create compliance costs and inefficiencies. Furthermore, adverse developments in one bank are more likely to have financial stability implications for several countries. These issues are certainly not exclusive to the EU. But the existence of the EU project adds an extra dimension, which brings challenges, responsibilities and also opportunities. Progress has been made in building the single market in financial services, but we are not there yet. In some segments of the financial markets, such as retail banking, there is a long way to go to achieve a fully integrated market. And recent experiences in relation to some cross-border acquisitions seem hardly compatible with the spirit of the single market. We face, therefore, several challenges: to safeguard the efficiency, effectiveness and consistency of supervisory action in more global and integrated financial markets; and to reduce the remaining obstacles to cross-border finance, both in terms of cross-border consolidation and in the provision of products and services. Some of these national differences have developed over a long period of time and go beyond the prudential or supervisory sphere.
Just two weeks ago I visited Rochester and Buffalo. One thing I tend to focus on in my meetings, more generally, is what hurdles businesses and households are facing that might be holding back growth. When we identify issues of concern, we factor those in to our decision-making and explore what we can do proactively to address these issues. This might include providing data and information that can assist others in tackling the underlying problems, or in convening stakeholders to discuss potential solutions and the best way forward. Recently, two themes have emerged from our community visits that warrant special attention. The first is in the arena of workforce development. Employers often have difficulty finding potential employees with the specific skills they need, and workers often lack the specific skills employers are looking for. Workforce development aims to bridge this gap. Good jobs increasingly require higher levels of skill and education, and a skilled workforce that is  BIS central bankers’ speeches  1  matched to the needs of employers is also necessary for an economy to grow and prosper. That is why I believe workforce development is so important for the long-term health of the economy. Our outreach group regularly engages with community leaders to help them take action to address workforce development needs and skill gaps. In fact, in Rochester, our team is partnering with several educational and community organizations to promote local workforce development programs.

For example, Etsy, the popular e-commerce website, which in many ways resembles a retail company, relies on technology to underpin its business model. But it’s not just New York City that is growing nicely. Employment levels on Long Island and in parts of upstate New York—most notably the Albany, Buffalo and Rochester metro areas—have also climbed and are at or near record highs. During my recent trip to upstate New York, I saw first-hand some of the positive developments in Rochester and Buffalo. After undergoing a prolonged period of economic transformation and reinvention, Rochester’s economy is now more diverse and dynamic than ever before. Meanwhile, the growth in Buffalo was striking. The numbers show a dramatic uptick in construction 2  BIS central bankers’ speeches  employment, and the visual evidence of development was widespread. I was especially impressed with the downtown and waterfront areas, as well as the new SolarCity factory—all of which looked dramatically different than when I visited the area less than two years ago. Both of these places are well positioned for future success. On the other hand, the employment recovery has been slow to take hold in both Northern New Jersey and the Lower Hudson Valley, where jobs are still not back to their pre-recession peak despite employment growing steadily. For Northern New Jersey, this lag is due, in part, to a stall in the growth of jobs in professional and business services. But the education and health sectors continue to add jobs, and construction employment is seeing a rebound.
In 2008, the Export-Import Bank of Korea and Industrial Bank of Korea successfully raised a total of RM2 billion via bond issuance in the Malaysian bond market. Moving forward, the sukuk market represents an important channel to reinforce regional financial integration. It presents an opportunity for Korean corporations to raise financing and issue sukuks out of Malaysia. In addition, Korean investors can also participate in the wide range of Islamic financial instruments in the Malaysian financial markets, including from more than 150 Islamic unit trusts, Islamic REITs, wholesale mutual fund products and other Islamic structured products. In addition to robust economic ties and potential financial links, Korea and Malaysia enjoy a growing mobility of talents. With the rise in Korean investment in Malaysia, this has led to an increase in Korean expatriates. Koreans are also coming to Malaysia as students and to participate in our Malaysia My Second Home programme. In addition, the Korean Wave, which spread to Malaysia in early 2000s, has contributed to make our country more aware of the Korean culture and traditions, thus promoting a better understanding between these two countries. Prospects for the Malaysian economy Malaysia is an economy that is transitioning into a new phase of development. In the current environment, our economy is now firmly on the recovery path. This year, the Malaysian economy is projected to grow in the region of 5% with further upside potential.

The MPC’s remit is to keep inflation at its 2% target, so the key issue for us is how far the financial crisis will affect the wider economy. That will depend on the answer to three broad questions. First, in the short term, how far will the severe liquidity squeeze that has already happened turn in to a full scale credit crunch – by which I mean a sharp tightening in the price and availability of credit to households and firms. Second, how well placed are households and firms to weather any such change in credit conditions? And third, in the longer term, will there be a significant lasting impact on credit conditions, for any given level of Bank Rate? It is too early to answer these questions with any great confidence, especially the last. But we do have some early evidence. There are signs that credit conditions facing firms have already tightened. The terms on corporate bank borrowing are often directly linked to the rates that banks charge each other. These rates have risen and remained high. Our latest intelligence suggests that the main lenders have tightened the terms on which they are willing to lend to businesses, and they plan to tighten them further. UK firms’ financial position is currently pretty healthy, on average, and large corporate borrowers in particular may have good alternatives to bank borrowing. But smaller and more highly geared firms may be more adversely affected.