samchain/econo-pairs-v1 huggingface dataset:
William C Dudley: Financial market turmoil – the Federal Reserve and the challenges ahead Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Council on Foreign Relations Corporate Conference 2009, New York, 6 March 2009. *  *  *  Thank you for having me here today. It is a pleasure being back to speak at the Council. In the past, my Federal Reserve colleague, Governor Daniel Tarullo, gathered panels of Wall Street economists here at the Council to talk about economic issues. When he invited me to participate, it was challenging work because Dan always asked us about our economic forecasts! And he remembered and recounted our past mistakes (and our much rarer, more prescient forecasts)! Before I begin, let me emphasize that my comments represent my own views and opinions and do not necessarily reflect the views of the Federal Open Market Committee or of the Federal Reserve System. What has happened to the global financial system is momentous. We have seen – despite extraordinary actions by central banks and governments around the world – a severe impairment of the intermediation process between borrowers and savers. We have seen a massive deleveraging of the non-bank financial sector. We have seen a tightening in financial market conditions even as the Federal Reserve has pushed the federal funds rate down close to zero. The result has been a severe loss of confidence among consumers and business and a global recession.

Philipp M Hildebrand: Developing countries and international capital markets Summary of a speech by Mr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, to economiesuisse, Zurich, 14 June 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  After having plummeted on the back of the Asian crisis, capital flows to developing countries have risen considerably again in the last three years. In 2005, they are likely to reach the approximate level at which they stood shortly before the Asian crisis. Capital flows are channelled mostly to a few emerging markets, notably China. China’s monetary order is currently undergoing profound changes, with the country gradually liberalising capital movements. The concept of the “impossible trinity”, which was developed by the Nobel Prize winner Robert Mundell, asserts that this will inevitably lead either to a loss in monetary autonomy or to a flexibilisation of the exchange rate regime. Both trends can be clearly observed: the pressure on the fixed exchange rate on the one hand, and the rapid expansion of the monetary and credit aggregates on the other. In the longer term, China’s monetary order will probably move towards floating exchange rates. This transition will hopefully be successful. As China’s monetary policy of gradual change has so far proved its worth, it is likely to serve as an example to other developing countries.
Increasing scarcity in that segment of the cash 5 / 10  BIS central bankers' speeches  market then also translated into a persistent rise in the specialness premia of such bonds, even when abstracting from year-end effects. Our decision to accept cash as collateral in securities lending, and to allow purchases below the DFR, contributed to relieving this pressure. Premia across maturity buckets are now broadly similar. The relatively low specialness premia for bonds with shorter maturities, in turn, also suggests that the majority of holders of such bonds – mainly non-euro area investors without access to our deposit facility, as I illustrated in a previous speech – were, and remain, generally willing to provide them in sufficient quantity in the repo market.10 Yet, this chart also reinforces the point I made earlier about the flow and stock effects of our purchases: with the effective supply of bonds gradually shrinking over time as a result of our purchases, specialness premia have been persistently inching upwards.11 While stock effects reinforce one of the key transmission channels of the APP by increasing the “value for money” – the bang for the buck – of new net purchases in terms of their impact on financial conditions, we also need to be mindful that a shortage of government bonds may over time adversely affect the intermediation capacity of repo markets. There are two reasons for this. First, government bonds are the main type of collateral used in repo markets, primarily because of their safety and liquidity.

(2015), “Understanding the role of debt in the financial system”, Bank for International Settlements, Working Paper No 479, January. 3 See Committee on the Global Financial System (2017), “Repo market functioning”, CGFS Papers, No 59; and  International Capital Market Association (2015), “Perspectives from the eye of the storm: The current state and future evolution of the European repo market”. 4 See e.g. Altavilla, C., G. Carboni and R. Motto (2015), “Asset purchase programmes and financial markets:  lessons from the euro area”, ECB Working Paper No 1864; Andrade, P., J. Breckenfelder, F. De Fiore, P. Karadi and O. Tristani (2016), “The ECB's asset purchase programme: an early assessment”, ECB Working Paper No 1956; and Blattner, T.S. and M. Joyce (2016), “Net debt supply shocks in the euro area and the implications for QE”, ECB Working Paper No 1957. 5 For a theoretical disposition, see Duffie, D. (1996), “Special Repo Rates”, Journal of Finance, Vol. 51(2), pp. 493-526. 6 See e.g. International Capital Market Association (2017), “European Repo Market Survey”, No 33, October. 7 Securities purchased under the PSPP have been made available for securities lending in a decentralised  manner by Eurosystem central banks since 2 April 2015. As of 8 December 2016, Eurosystem central banks have the possibility to also accept cash as collateral in their PSPP securities lending facilities without having to reinvest it in a cash-neutral manner. The aim of securities lending is to support bond and repo market liquidity without unduly curtailing normal repo market activity.
For this reason, in 2022, work has been done on drafting and implementing the "National Strategy of Financial Education and Inclusion", which aims to improve financial literacy and inclusion of the public at large. Finally, significant improvements have taken place in terms of improving the governance of the institution, through updating risk management systems and ensuring business continuity with the best international practices. In particular, due to the organized cyber-attacks that the country faced last year, the Bank of Albania paid special attention to the enhancement of stability in: the banking sector; in markets; and in the payment systems which the Bank of Albania operates. In more concrete terms, the Bank of Albania reviewed continuity plans for the recovery of the institution's activity in the event of a cyber-attack, intensified the controls and monitoring it performs on the systems and services it provides, and strengthened cooperation with local institutions, such as the National Electronic Certification Agency and Cyber Security (AKCESK) and the Albanian Association of Banks, as well as with international institutions, such as the International Monetary Fund and the World Bank. *** Honourable Members of the Committee, Concluding, allow me to re-emphasise that price stability has been and remains the main mission of the Bank of Albania. Preserving the purchasing power of our national currency, guaranteeing the value of Albanian households' savings, supporting financial stability and establishing the most optimum crediting conditions for a long-term period, are the best service we can do for the Albanian economy.

See Panetta, F. (2022), “A digital euro that serves the needs of the public: striking the right balance”, introductory statement at the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 30 March and ECB (2022), “Digital euro – Privacy options”, presentation to the Eurogroup, 4 April. 4. Panetta, F. (2022), op. cit. 5. Consumers are already increasingly turning to non-cash payments. Only 20% of the cash stock is now used for payments, down from 35% 15 years ago. See Zamora-Pérez, A. (2021), “The paradox of banknotes: understanding the demand for cash beyond transactional use”, Economic Bulletin, Issue 2, ECB, Frankfurt am Main. 6. We are accustomed to using private and public forms of money interchangeably. Euro banknotes and coins are legal tender in the euro area, and cash is the only form of public money to which everyone can have direct access. Confidence in private money – bank deposits, credit cards and e-payment solutions – rests on the ability to convert it, at par, into public money. This allows payment systems to run smoothly and commerce to flow. 7. Panetta, F. (2021), “Central bank digital currencies: a monetary anchor for digital innovation”, speech at the Elcano Royal Institute, Madrid, 5 November. 8. Panetta, F. (2021), “The present and future of money in the digital age”, lecture at Federcasse’s Lectiones cooperativae, Rome, 10 December. 9.
With effect from 1 July 2022, we are also adjusting the threshold factor used to calculate the level of banks’ sight deposits at the SNB exempt from negative interest. The factor will be lowered from 30 to 28. This will ensure that the secured short-term Swiss franc money market rates are close to the SNB policy rate. Page 1/5  Berne, 16 June 2022 Thomas Jordan  News conference  Inflation forecast Inflation reached 2.9% in May and is likely to remain at an elevated level for the time being. The main reason for the higher inflation is the increase in the prices of oil products, food and goods affected by the global supply bottlenecks. However, there has also been a rise in inflation for some other goods and services. The SNB’s new conditional inflation forecast is based on the assumption that the SNB policy rate is −0.25% over the entire forecast horizon. The new forecast for the next three years is above that of March (cf. chart 1), and stands at 2.8% for 2022, 1.9% for 2023, and 1.6% for 2024 (cf. table 1). Without today’s SNB policy rate increase, the inflation forecast would be significantly higher. Global economic outlook Let me turn to the economic outlook worldwide. Global economic growth has slowed markedly recently. This slowdown is on the one hand attributable to the high level of inflation, which is weighing on purchasing power and thus reducing demand.

Third, that the system does not do business and exist on the basis of an implicit commitment that the State will have to use public money, the public’s money, to bail out firms that get into trouble. And fourth, that the public can place trust in firms and markets based on their reputations and the transparency of their dealings. Regulation is important and it can help to foster that trust, but it cannot substitute for the trust that the public needs to have, in firms and markets. The State is not there to support the industry, and regulators are not there to substitute for trust in and the reputation of firms and markets. Some important principles follow from the identification of the public interest in financial stability. First, a competitive financial system can only exist if it is rooted in stability: competition and stability cannot be traded off in a binary sense. Second, the public should not define financial stability as preventing all financial firms from failing. In other sectors of the economy firms fail without putting at risk the funds of the public or taxpayers’ money. We will not truly have solved the too big or important to fail problem and thus the public money problem until we have tools at our disposal which enable us to resolve large institutions if they get into trouble. This will create the right incentives for risk management. And third, regulators must use their judgement to mount a robust challenge to stop dangerous business models and investment practices.
In response, and echoing Roosevelt in 1938, President Bush granted the SEC authority to suspend fair value rules. Although this authority was not invoked, it demonstrated a willingness to provide system-wide forbearance through fair value accounting rules. Today, the self-same cycle is in motion. During the long pre-crisis boom, fair value principles gained ground, in particular in the valuation of debt, equity and derivatives: in the US, through Statement of Financial Accounting Standard 157 (SFAS 157); internationally, through International Accounting Standard 39 (IAS 39). As in the roaring ‘20s, rising asset prices, marked to market, inflated bank profits and balance sheets. Between 2000 and 2007, major international banks recorded accumulated gains in their trading book totalling over £ billion. But as the crisis tide has turned, with falling asset prices and failing banks, so too has the fair value debate. In 2008, under intense pressure from an ailing banking community, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) eased back on fair value accounting rules. For example, banks were allowed to switch financial instruments from trading to holding to avoid mark-to market requirements. So, historically, fair value accounting principles have gained ground when the going has been good, and lost it when it has got tough. From a financial stability perspective, this is a cause for concern. To see why, consider how banks’ balance sheets then appear to investors. During the asset upswing, fair value gains ground. Mark-to-market gains are booked as profits.

The May meeting is part of the Committee’s ongoing commitment to ensure that the Core Principles remain current and relevant to bank supervisors worldwide. Let me move on to the Basel Committee’s initiative to revise the 1988 Accord. As you know, capital has played, and continues to play, an important role in the supervisory tool kit. Adequate capital helps ensure that shareholders monitor the risk of financial institutions, and that management puts in place and maintains appropriate oversight mechanisms to help prevent problems from surfacing in the first place. Should an institution experience difficulties, capital serves as a buffer to absorb losses and reduce the risk of spillover from a problem institution to other financial institutions. The primary tool of capital regulation currently is the set of minimum ratios that were devised in 1988 by the Basel Committee on Banking Supervision. They were set forth in an agreement known as the Basel Accord, and were adopted, among other reasons, to address the slide in international capital levels that was occurring over the previous decade. The Accord was clearly a milestone achievement for the first time, supervisors in G10 countries were able to use a common yardstick for assessing banks’ capital adequacy. But the Accord has a number of serious shortcomings. For example, it does not adequately differentiate among degrees of credit risk and, as a result, banks have had incentives to take on higher  7  BIS Review 27/2000  risk exposures within broad risk categories.
In Hong Kong, China, for instance, SMEs account for 98% of business establishments and employ nearly half of the total workforce. They provide a broad range of employment opportunities and play an important role in reducing urban poverty. It is no exaggeration to say that when SMEs thrive, the economy prospers. This is also true vice versa. SMEs are particularly vulnerable to economic downturns, as banks often reduce their lending to the SME sector due to credit concerns. The exceptional severity of the credit crunch during the global financial crisis has therefore posed great challenges to the SMEs. In response, the Government of Hong Kong, China swiftly rolled out a temporary $ bn Special Loan Guarantee Scheme (SLGS) in December 2008 to alleviate the difficulty of SMEs in obtaining bank finance and the potential surge in unemployment due to the closing down of SMEs. Together with other short-term government stimulus measures, the SLGS has been successful in supporting the SMEs to sail through this once-in-a-century crisis and limit the potential knock-on impact on the economy. Unemployment rate increased by a modest 2.3 percentage point to peak at 5.5% in September 2009. This compares with the 4.3 percentage-point increase during the Asian financial crisis when no such temporary SME support measures were available. The economy contracted briefly by 2.7% in 2009 and rebounded strongly the following year to achieve 6.8% growth. As economic conditions improved and market liquidity normalised, the Government exited from this emergency measure and ceased to receive new applications of SLGS after end2010.

Peter Pang: The SME sector – an important pillar of many economies Statement by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary and Head of Delegation, at the 44th Asian Development Bank Annual Meeting, Hanoi, 5 May 2011. *  *  *  I would like to thank the Government and the people of Viet Nam for their warm hospitality in hosting this year’s Annual Meeting of the Asian Development Bank. I would also like to take this opportunity to express my deepest condolences to the people of Japan affected by the recent tragic events. The global recovery has gained traction, with emerging Asia in particular rebounding strongly from the global financial crisis. Compared with the last Asian financial crisis, the damage to the real economy of the region was much more contained this time. This is in large part attributable to the reforms taken by regional economies over the years to strengthen economic fundamentals and improve the resilience of their banking and financial systems. In addition, a number of regional economies have also promptly taken temporary extraordinary measures to support their economies and cushion the impact on employment. A number of these supportive measures were targeted at assisting the small and medium-sized enterprise (SME) sector, which is an important pillar of many economies. SMEs play a crucial role in the economic growth and job creation of both developing and advanced economies.
This brings me to my second proposition. Because of the existence of the zero lower bound, it is far easier for monetary policy to fight inflation by raising interest rates than to combat deflation by lowering them. Although central banks world-wide have used a range of non-standard measures to stimulate economic activity and push inflation up to the target, in practice, this has proven to be extremely difficult. Moreover, as I pointed out earlier, the institutional set-up of the euro area rules out the easiest policy option to raise inflation, namely the monetisation of budget deficits. Furthermore, in the euro area as a whole, monetary policy was, for a long time, “the only 6  game in town”. With many sovereigns weighed down by excessive debt burdens, there was no space for fiscal policy to play its part in supporting monetary policy in stimulating the economy. Rather, in many countries, the necessary focus on austerity measures meant that monetary policy and fiscal policy were operating at cross-purposes. Unfortunately, those euro area countries with space to manoeuvre chose not to do so. To sum up, monetary policy can influence nominal economic variables. In the long run, however, it cannot influence real economic variables, which depend on the economy’s endowments of factors of production and the efficiency with which they combine to produce output. This highlights the importance of structural reforms to ensure that the economy operates as efficiently as possible.

In the long run, the level of output that an economy can generate depends on the capital stock, the labour supply and the productivity of factors of production. In the steady state, all these factors are outside the scope of monetary policy. Given that monetary policy cannot determine the long-run values of real economic variables then, the argument goes, it is best to let monetary policy focus on what it can really control, namely nominal variables or, in other words, prices. This brings me to my first proposition: by and large monetary policy cannot affect real economic developments in the long run. The long-run potential output of an economy depends on structural features of the economy, including demographic developments, labour force participation rates, levels of educational attainment and efficiency in product and labour markets. It also depends on the transformation of savings into investment, that is, the proper functioning of banks and financial markets. Success in these domains depends on other  2  policy makers, notably governments, which can undertake structural reforms and often play a major role in the provision of education. So what can monetary policy actually do? In the near term, monetary policy nevertheless has a role to play. By influencing aggregate demand, it can cushion the economy from the impact of adverse shocks. In this way, it can limit the volatility of output from its long-run, or potential, level. Moreover, by sustaining demand in the short run, it can prevent a cyclical downswing in the economy from becoming entrenched.
Ravi Menon: Reforms in banking regulation – effects and outcomes Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Symposium on Asian Banking and Finance, San Francisco, 11 July 2016. *  *  *  Mr John Williams, President of the Federal Reserve Distinguished guests, ladies and gentlemen, good morning. Bank  of  San  Francisco  Let me, on behalf of the Monetary Authority of Singapore, express our appreciation to John and his colleagues at the San Francisco Fed. •  It has been a fruitful collaboration on this Symposium. •  We had a good meeting in Singapore last year, and my colleagues and I are very pleased to be here in San Francisco for this year’s Symposium. There has been no lack of excitement for global financial markets over the past year: •  the US Federal Reserve Bank’s deliberations whether to raise interest rates;  •  China’s transition to a more market-based exchange rate amidst a slowdown in economic growth; and more recently  •  the decision by UK voters to leave the European Union. But even as banking stocks have taken a pounding – forgive the pun – the global banking system has generally held up well. There are no doubt fragilities in some European banks, but as yet no disorderly failure or contagion. I think this has at least something to do with the regulatory reforms put in place since the financial crisis.

Now there is also the worsening of geopolitical tensions surrounding Iran which could significantly affect the oil price, with negative effects on world growth and stronger pressures on inflation. In Chile, the persistence of strong domestic spending may alter the baseline scenario in two ways. On one hand, it may intensify the inflationary risks now perceived, and increase the propagation of supply-side shocks, like those in oil or fresh fruits & vegetables. It is also possible that the velocity at which core inflation has increased is associated with tighter output gaps than assumed in the baseline scenario. On the other hand, the sustained growth in domestic demand may trigger a widening of the current account deficit and amplify the effects of shocks from abroad on the Chilean economy, especially if accompanied by a falling copper price. Let me share with you some final thoughts. Final thoughts The macroeconomic environment just described has opposing effects, as there are significant risks from different fronts. As I said, the baseline scenario uses as a working assumption that the MPR will follow a path comparable to the one that can be derived from the prices of financial assets observed at the statistical cutoff of this Report. Any deviations away from this trajectory will depend on the implications of domestic and external macroeconomic developments on the inflation outlook. As I also said at the beginning, while risks for short-term inflation have increased, the risks from abroad are still important and may cause significant damage to the Chilean economy.