samchain/econo-pairs-v1 huggingface dataset:
At the same time, one should remember that we are still in the same economic playing field, with the same regulations and the same referee, constantly striving to make economic progress to achieve the best possible welfare – a process that actually has no end. Similar experiences Economic developments in Sweden during the 1980s and 1990s are very reminiscent of developments in Finland. Like Finland, Sweden underwent an overheating at the end of the 1980s, which was mainly due to an excessively high domestic demand, partly due to insufficiently tight fiscal policy, a rapid credit boom and rising asset prices in the wake of the successive deregulations - all within the framework of a fixed exchange rate regime that set limits as to how far the steering interest rate could be used to govern the level of domestic activity. The fact that Sweden and Finland did not have much to counter with when the currency crisis really got its claws into the European Exchange Rate Mechanism in 1992, should be regarded in the light of the imbalances built up within their economies over several years. It was an uneven battle, although Sweden changed its fiscal policy and the Riksbank did all it could to defend the currency, raising its steering interest rate to 500 per cent. However, Sweden was forced to abandon the fixed exchange rate as an anchor to achieve price stability in November 1992. Finland had replaced its fixed exchange rate regime earlier in the autumn.

Terrence J Checki: Observations on the global economy and financial system Remarks by Mr Terrence J Checki, Executive Vice President of the Emerging Markets and International Affairs Group of the Federal Reserve Bank of New York, at the IIF Annual Meeting of Latin America Chief Executives, Santiago, Chile, 6 March 2013. *  *  *  Good afternoon. Thank you, Tim (Adams), for the kind introduction. Let me take this opportunity to congratulate you and wish you well as you take the helm of the IIF (Institute of International Finance). It is a pleasure to be here in Santiago, and to see so many old friends among the distinguished participants. Having spent much of my early career in this part of the world during difficult times, it is gratifying to be reminded first hand of the progress the region has made. That progress is especially evident here in Chile. In my remarks this afternoon, I thought I would offer a few reflections on the current state of the global economy and financial system, and some of the challenges going forward. Let me note, for the record, that my comments this afternoon are personal, and should not be taken as reflecting the views of the Federal Reserve Bank of New York, or the Federal Reserve System. As we all know, the mood in global markets has improved quite a bit since the middle of last year: stocks are up, spreads are down, volatility is lower, and capital market activity has picked up.
Risk of misleading image and uncertainty about the inflation target This has caused some difficulties, and will likely continue to do so in the future, not least in terms of monetary policy communication. One problem is that the focus on CPI inflation – which in itself is not entirely unnatural – has led to flashy headlines in the media from time to time over the years about Sweden being in a state of deflation. When CPI inflation is negative, this is obviously correct in a purely technical sense, but the story behind the headline often fails to explain that it is to a large extent a result of the Riksbank lowering the interest rate, and that CPIF inflation typically is considerably higher. Foreign commentators in particular have therefore often come to the conclusion that the Swedish economy is in a highly critical situation and that the state of the real economy is deflationist as well, with very weak growth in production and employment. It cannot be ruled out either that this kind of media reporting can, at least to some extent, affect economic sentiment. It is of course unfortunate if this kind of misleading image takes hold simply because the Swedish CPI is calculated in the way it is. A potentially more serious problem is that even if CPIF inflation were reasonably close to 2 per cent, the formal target variable, CPI inflation, could be relatively far from the target for fairly long periods of time.

Sources: Statistics Sweden and the Riksbank  Figure 4. CPI inflation deviates significantly and for a long time from the inflation target  Note: The CPIF is the CPI with a fixed mortgage rate. Sources: Thomson Reuters and the Riksbank  12  BIS central bankers’ speeches
The low interest rate environment is also bolstering momentum on the real estate markets. However, with all of these problems it is not so much the negative interest rate itself that is a major factor, but rather the exceptionally low level of interest rates that has prevailed worldwide for years, and which I referred to at the beginning of my speech. These challenges did not appear only when the SNB started charging negative interest, but rather reflect the protracted decline in global interest rates. In the current situation, interest rates would remain low even if we were to stop charging negative interest, and the knock-on effects would thus also persist. Page 5/8  Safeguarding Switzerland Ladies and Gentlemen, would the citizens of Switzerland be better off if the SNB did not impose its negative interest rate? Allow me to play through a brief scenario in this regard. What would happen if we were to simply stop charging negative interest in the current environment? Dispensing with the negative interest rate would have a substantial impact on the Swiss economy. Swiss short-term interest rates would again be higher than in other countries, which would clearly increase the attractiveness of Swiss franc investments. This is turn would cause the franc to appreciate, which would be detrimental to economic momentum in Switzerland and would see unemployment rise and inflation pushed into negative territory. If we stopped charging negative interest, would that at least be beneficial for savers, pension funds, life insurers and banks?

From mid-2014 onwards, the international monetary policy environment began to change. On the one hand there were increasingly clearer signs that the US was about to adopt a tightening stance, whereas in the euro area a loosening of monetary policy was becoming more and more likely. The euro subsequently depreciated markedly against the major currencies. As a result, by the beginning of 2015 the minimum exchange rate was no longer sustainable. To retain control over our monetary policy, we therefore decided in January 2015 to change tack. In that exceptional situation, we had to weigh up the pros and cons of using alternative unconventional instruments. It became apparent that we would have to lower interest rates below zero given that various other central banks had already done so. This was the only way we could limit the appeal of the Swiss franc. When we discontinued the minimum exchange rate, we thus also imposed negative interest of –0.75% on banks’ sight deposits held at the SNB. This then brought the level of interest rates in Switzerland back down below that in other countries. Coupled with our willingness to intervene in the foreign exchange market as necessary, the negative interest rate has taken the pressure off the Swiss franc and prevented a sharp drop in inflation.
China Aoyuan Property Group Limited, a firm from Western China, listed two bonds, totalling $ million on the Singapore Exchange this year. China’s first cross-border REIT containing outlet malls in the Western Region was launched on the Singapore Exchange this year, with a $ million IPO listing. Raising capital in Singapore has allowed Chinese companies to diversify their investor base, taking advantage of Singapore’s $ trillion pool of assets under management. And as the largest REIT market in Asia ex-Japan, Singapore can help connect Chinese assets with a diversified pool of investors, including high net worth individuals from ASEAN and global sovereign wealth funds. New Connectivity for New Growth: Western China and ASEAN The CCI has made great strides in strengthening the collaboration between Chongqing and Singapore. Now is the time for CCI to take flight, and soar in reach of broader connectivity between Western China and ASEAN. Let me cite four areas where we can do this. First, building robust channels for SME financing. ASEAN and the Western Region can work together to develop more innovative SME financing solutions. Our financial institutions from both sides have started to collaborate in this area. One of Singapore’s banks, OCBC, has partnered Chongqing Rural Commercial Bank to provide loans for SMEs in Chongqing. Lu International, a subisidiary of Lufax under the PingAn Group in China, and other Singapore institutional investors will be collaborating with Chongqing Financial Assets Exchange to help micro finance companies issue debt overseas. Second, diversifying funding channels for outbound Chinese corporates.

3/5  BIS central bankers' speeches  Singapore can support the financing needs of Chinese companies expanding into Southeast Asia and beyond. Take for example, the New Hope Group, an agricultural and food processing company based in Western China. It has been raising funds in Singapore for its overseas expansion. Or companies such as Chongqing Western Modern Logistics Industry Zone Development Construction and Chongqing Grain Group. They have issued close to $ billion of bonds from Singapore. Bond issuance by Chinese issuers in Singapore almost doubled in 2017 to reach $ billion. More than 25% of this amount was issued by first-time Chinese issuers in Singapore. Singapore’ Asian Bond Grant Scheme will help such first-time issuers by offsetting a part of their typical issuance costs. Haier Group, a leading Chinese consumer electronics player, benefitted from this scheme when it issued a $ billion perpetual debt security in Singapore. Third, enhancing risk management for Chinese firms. Chongqing and Singapore can explore joint projects to mitigate the economic impact of natural catastrophe risks in the Western Region. One example is through piloting a natural catastrophe insurance pool. Similar initiatives are underway in Southeast Asia – and we could share experiences. In May this year, ASEAN+3 Finance Ministers agreed to establish the Southeast Asia Disaster Risk Insurance Facility (“SEADRIF”), which provides disaster risk financing, and a regional catastrophe risk insurance pool for participating ASEAN member states.
U.S. growth may weaken more than foreseen, with effects on financial markets – in particular stock index reversals – and new  4  BIS Review 126/2010  postponements of the monetary stimulus withdrawal. The fiscal accounts in developed economies – especially in some countries in Europe – is still cause for concern, mainly because of their effects on perceived risks and in the final recovery of the world economy. Furthermore, measures adopted in China to limit credit growth and prevent an overheating may result in a weaker world economy and lower commodity prices. As usual, the persistence of global imbalances entails risks both on capital flows across economic areas and on the behavior of parities between different currencies. In the recent past, the trajectory of international food prices has reopened the concern on its future performance and its impact on inflation, given the high degree of pass-through we observed in Chile from world price hikes in 2007 and the first half of 2008. Overall, it is not that clear that, if wheat prices continue to rise internationally, the local economy will replicate them, because domestic margins have remained fairly large. If any of these scenarios materializes, there will be direct consequences for the growth and inflation scenario foreseen by the Board. After considering all the elements described, the Board believes that the balance of risks for inflation and output is unbiased, and we reiterate that we will continue to use our policies with flexibility so that projected inflation stands at 3% in the policy horizon.

8  BIS Review 126/2010  Figure 6 Stock market volatility (percent)  Long-term interest rates in developed economies (3) (percent)  120  120  6  6  100  100  5  5  80  80  4  4  60  60  3  3  40  40  2  2  20  20  1  1  0  0  0  0  07  08  09  10  Developed markets (1) Emerging markets (2)  05  06 U.S.  07  08 Japan  09  10 Eurozone  (1) Uses VIX volatility index. (2) Estimated volatility of the MSCI index in dollars. (3) 10-year government bond interest rates. Sources: Bloomberg and Morgan Stanley Capital International. Figure 7 Output gaps (*) (percent)  6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6  08  09 June 2010 Report  10  11  -6  September 2010 Report  (*) Gray area shows forecast as from the third quarter of 2010. Source: Central Bank of Chile.
We have tested numerous tools including overnight reverse repurchase operations, term reverse repurchase operations and term deposit facilities to ensure that, when the time comes, lift-off can be managed smoothly. As the FOMC has communicated, the primary tool will be interest on excess reserves (IOER), with overnight reverse repurchases as a supplemental tool to be used as needed to help ensure a firm floor under short-term interest rates. BIS central bankers’ speeches  3  Once normalization has begun, two important questions will be: How fast will it proceed? And how high will short-term rates ultimately need to go? How fast the normalization process will proceed depends mainly on two factors: how the economy evolves and how financial market conditions respond to movements in the federal funds rate target. If financial market conditions do not tighten much in response to higher short-term interest rates, we might have to move more quickly to achieve the appropriate restraint on financial market conditions. In contrast, if financial conditions tighten unduly, then this will likely prompt us to go much more slowly or even to pause for a while. Our intention will be to move short-term interest rates in a manner to generate the set of financial market conditions that we deem to be most consistent with achieving our employment and inflation objectives. The question of how high short-term rates will ultimately need to go before we approach a neutral monetary stance is a difficult question, which is hard to pre-judge for a couple of reasons.

These three most important elements are dependent on developments abroad, international financial markets, and global demand for commodities. The Swiss franc exchange rate, by comparison, does not play a decisive role. There is thus no contradiction between having a strong Swiss franc and a large current account surplus. Nor is the surplus a suitable measure for assessing Switzerland's share in global imbalances. It is much more the case that Switzerland and its extensive level of direct investment abroad contributes significantly to balanced global economic growth. SNB monetary policy is focused on ensuring price stability. In so doing, it takes due account of economic developments. To fulfil this mandate, the SNB must secure appropriate monetary conditions. The current account surplus does not play a role in monetary policy. In an open economy like Switzerland, however, sizeable exchange rate fluctuations have a strong impact on production and prices. In the current environment, and with interest rates close to zero, the minimum exchange rate is therefore the correct monetary policy instrument. The SNB will continue to enforce it with the utmost determination. BIS central bankers’ speeches  1
It is not a case of rescuing banks and bank management for their own sake or that of the shareholders or of “giving away taxpayers’ money” as it is sometimes wrongly described in the debate. In the long term we need a well-developed system for managing insolvent institutions The Riksbank’s possibility to provide liquidity assistance to a financial institution when financial stability is threatened assumes that the institution is solvent and able to continue to pursue its operations. In the case of Carnegie, Finansinspektionen withdrew the institution’s licence to conduct banking operations on Monday this week. The Riksbank then withdrew its liquidity assistance to the bank, is it no longer met the criteria for being granted this type of credit. The Riksbank’s loan to Carnegie Investment Bank AB has been repaid by the Swedish National Debt Office, which has taken over the debt and now owns the company. The Debt Office can now take over a financial institution, as in Carnegie’s case. This applies in a situation where an institution that does not meet the requirements for liquidity assistance from the Riksbank has to default on its payments and this is assessed to threaten financial stability. This is made possible by the stability plan for the financial system decided by the Riksdag just over two weeks ago. The stability plan also means that the government can extend guarantees to individual institutions or to a group of institutions.

As I mentioned earlier, this has a restraining effect on the economy, not least in that investments fall. Developments on stock markets around the world have fluctuated considerably and on the whole there has been a substantial fall. In many countries property prices are also falling, but in Sweden the decline has on the whole been fairly limited so far. However, all in all this development has led to a decline in wealth for many Swedish households, which is expected to dampen consumption. Various surveys indicate that households and companies have a more pessimistic view of the future now. The financial crisis has contributed to a deterioration in the prospects for global economic activity and to dampening international demand. The price of many commodities, such as oil and food, has fallen. This gives lower inflationary pressures. When international demand is lower, the Swedish economy is also affected via exports. We are assuming that exports will slow down next year, but recover during 2010. It is also clear that the uncertainty in the economy has increased in general. This affects households’ and companies’ financial decisions regarding the future. The uncertainty can also have contributed to the recent substantial weakening in the Swedish krona against most other currencies. It is not unusual that the value of currencies of small and very exportdependent economies, like Sweden’s, falls in times of market turbulence. This was the case, for instance, after the Asia crisis and the acts of terrorism on 11 September 2001.
The MyInfo platform allows banks to more effectively and efficiently obtain authenticated and updated information for account opening and other applications, doing away with the tedium of manual physical authentication and resulting in time saving of as much as 80% for banks and their customers. 25. Second, we are reviewing our regulatory framework to balance the tension between encouraging innovation and managing risk. The Payments Services Act is a forward looking and flexible framework for the regulation of payment systems and payment service providers in Singapore. It gives regulatory certainty to new players to pursue innovation and growth, while at the same time providing sufficient safeguards for consumers. 26. Third, we are creating more channels to promote the exchange of ideas and collaboration among financial and technology firms. Since 2016, MAS has partnered industry players to bring together financial and technology players from all over the world in the week-long Singapore FinTech Festivals. Turnout has more than quadrupled over the past three years with 45,000 participants from 130 countries in 2018. It is early days yet, but the results of our efforts are encouraging. Singapore is widely regarded as one of the leading FinTech hubs in the world. A report by Ernst & Young finds that nearly 7 out of 10 Singaporeans have made use of FinTech solutions in 2019, making us a leader in the Asia-Pacific region. 27. Another important development has been among our local banks themselves. They have been expanding their digital platforms to better cater to customers’ needs, and grow markets abroad.

In addition, they would amplify the effects of the Financing Union: such a Union would foster firms’ ability to invest and national reforms would foster firms’ willingness to invest. The third lever is a euro area policy-mix based on a better coordination of macroeconomic policies. This requires a collective economic strategy whereby Member States seal a deal: if we combine more structural reforms where they are needed – in France and Italy for instance –, and more fiscal or wage support in countries with room for manoeuvre – for example, Germany and the Netherlands – growth and employment will undoubtedly be stronger everywhere in Europe. If we seize this opportunity, Europe’s time will come. Thank you for your attention.
Similarly, dealers apparently are unwilling to provide the funding and the balance sheet capacity necessary for their leveraged clients to arbitrage away this dislocation. The degree to which this shift in the yield spread between Treasury and interest rate swap yields is due to the differential capital requirements imposed on cash versus derivative instruments warrants more investigation. Just as market and funding liquidity are interlinked, so are funding liquidity and capital requirements. All else equal, stronger capital requirements reduce firms’ vulnerability to runs. This suggests that funding liquidity risk can be addressed in many different ways. First, capital requirements can be bolstered to reduce the risk that a firm will become insolvent in particularly bad states of the world. Second, improved reporting and transparency can reduce the degree of uncertainty about whether a firm is solvent, thus reducing the risk that  6  Brunnermeier and Pedersen (2009) “Market Liquidity and Funding Liquidity” Review of Financial Studies 22(6) pp. 2201–2238 provide a theory that features strong correlation between market and funding liquidity during crises. 7  Hu, Pan, Wang (2013) “Noise as Information for Illiquidity” Journal of Finance 68(6), pp.2341–2382 provide further evidence on the relationship between yield curve fitting errors and alternative funding liquidity metrics. 4  BIS central bankers’ speeches  investors might wrongly perceive that a firm is insolvent, when, in fact, it still has adequate capital.

For this to become a reality, it will require a change in mindset and vision, coordination and investments by the industry today, to position itself for the future for a much bigger role in financing intangibles. The real economy is undergoing significant transformation and the financial sector has to keep pace. To remain relevant, just as financing looked to physical assets in the industrial age, it must look to intellectual assets in the information age. A first step needs to be taken. It needs to be taken expeditiously. 2  BIS central bankers’ speeches