samchain/econo-pairs-v1 huggingface dataset:
The growth of fixed asset investment, broad money and bank credit slowed down quickly in the second quarter of the year, although not without causing serious concern about the possibility of a hard landing. To be sure, the bluntness of administrative measures did lead to inconveniences and perhaps casualties among innocent parties, as cash flow, for a time, dried up for almost everybody rather than the targeted activities. But by and large the measures are working. And about two weeks ago these were interestingly buttressed by increasing interest rates and further liberalisation in the determination of deposits and lending rates. This is another encouraging development in market reform. Let me, lastly, say a few words about the RMB exchange rate. I do not have the privilege of inside knowledge on the subject. The fact of the matter is that there is only a small current account surplus. It is true that there has been large capital inflow lately, as manifested in the rapid build-up of foreign reserves. This was predominantly the result of international political pressures for a more flexible exchange rate. As such it would be a temporary phenomenon, although, with interest rates of the RMB higher than those of the US dollar, there is a significant cost incurred in sterilisation. In so far as the maintenance of a fixed exchange rate is concerned, this is currently not a problem, particularly with capital controls.

www.perjacobsson.org/lectures/101213.pdf 4 See Kydland, F. and E. Prescott (1977) “Rules rather than discretion: The inconsistency of optimal plans”,  Journal of Political Economy, 85(3), pp. 473–92 and Alesina, A. and L. Summers (1993) “Central bank independence and macroeconomic performance: Some comparative evidence”, Journal of Money, Credit and Banking 25(2), pp. 151–162. 5 See Nicholas Bloom (2009), “The Impact of Uncertainty Shock”, Econometrica, Volume77, Issue3, Pages 623–  685 6 The final version is scheduled for publication on 22 February 2019. 7 Press conference given by Mario Draghi, 24 January 2019. 8 “ECB Monetary Policy and the Resilience of the Eurozone”, Columbia University, New York, 19 April 2017,  speech by François Villeroy de Galhau, Governor of the Banque de France. 9 Address given by Mário Soares on the European Community of the future (Lisbon, 19 October 1990). 6/6  BIS central bankers' speeches
As we have heard this morning, the Eurosystem is making a significant contribution by developing a wholesale payment system, known as TARGET2, which will provide for safer and more efficient large-value payment flows within the euro area. I would agree that more has to be done by the competent authorities to achieve higher integration for retail payments and securities transactions. However, the Eurosystem, together with the European Commission, is actively supporting the Single Euro Payments Area initiative and has devoted much effort to promoting more efficient and safer securities settlement systems and to facilitating the cross-border use of collateral. In any event, I have the impression that in years to come the Eurosystem will have to strengthen further both aspects of its policy approach. As EMU is not likely to become a much more homogenous area in the foreseeable future, the need might be felt to pay more attention to key national economic developments on the basis of the contribution by the National Central Banks, therefore making more intensive use of the federal organisation of the European monetary authority. My feeling is that country-specific analysis is proving increasingly informative for fully understanding the situation, prospects and policy needs of the euro area as a whole. Similarly, I would not be surprised if the ECB were to find it appropriate in the future to raise its profile somewhat in defending a more integrated and liberalised market for financial services in Europe.

Hence, there is much to be gained in terms of greater resilience and efficiency of the financial system through the design of regulatory and supervisory frameworks aimed at combating the factors that underlie a poor assessment of risks at their root. In this sense, a sound prudential framework should provide financial institutions with the right incentives to properly assess and monitor the risks of their investment and lending policies, incorporating them accordingly into their pricing decisions. Increased awareness of risks, and how these evolve along the business cycle, favours earlier reactions to changing conditions and smoother adjustments in the flow of credit, thus reducing the likelihood of episodes of abrupt liquidity and credit contraction. The New Capital Accord, known as Basel II, is an example of a prudential framework that makes the foregoing principles I have outlined its centrepiece, since it seeks to strengthen the stability of the international banking system by promoting the implementation of more robust and comprehensive risk management practices. It does so mainly by establishing a more precise and sensitive system to link banks’ real risks and the minimum regulatory capital requirements, and by imposing higher levels of transparency in banks’ financial reporting, hence fostering closer scrutiny by market participants. A more risk-sensitive capital framework tends to make banks more watchful of the actual risks of lending policies focused on short-run targets, such as market share or portfolio size, which presumably are important ingredients in periods of credit booms sustaining speculative activities.
The same menu, consisting of exactly the same brand products, would cost £ today. The food basket has increased in price by a factor of 48. A vacuum cleaner, if you wanted one in 1910, cost £ That is more than 6 years worth of food based on the menu used in the previous example. A vacuum cleaner was an item of such luxury that owners would invite their friends round to ‘Hoover parties’ to show off their prized possession. Over the years, the price of food increased in nominal terms by a factor of 48, but the price of vacuum cleaners stayed roughly the same. Today you can still buy a vacuum cleaner for £ But that is only 47 days of food shopping, rather than 6 years. As vacuum cleaners became cheaper relative to food, people bought more of them - ignoring such change would introduce a substitution bias. If there is any degree of substitutability between products, then rational consumers would have taken account of such changes in relative prices, and the weight of this particular good in the consumption bundle may  BIS Review 68/2002  13  have changed. The overall result of the substitution is that the expenditure share of electrical 6 appliances has not changed much, at least not in the past 50 years.

This project is essential to overcome the problems of fragmentation which still beset European markets and which cause the perception of risk associated with banks’ liability instruments to differ depending on the jurisdiction in which they operate. However, as you know, to ensure that non-viable banks are resolved in the same way in the various Member States of the euro area, it does not suffice to have a set of common regulations; rather, it is necessary to have a single resolution authority to ensure that the regulations are applied uniformly in all countries. Similarly, the financial support needed for orderly bank resolution must be available under similar conditions whenever required. Clearly the lack of a full European resolution mechanism (including uniform rules, a single authority and a common fund) would limit the effectiveness of the single supervisory mechanism. In that case, the single supervisory mechanism would have to resort to a complex system of interaction with the national authorities (which would have to continue using their resources to cover the fiscal effects of the problems of non-viability detected by the supervisor) to ensure financial stability. In this respect the draft legislative proposal submitted by the European Commission (EC) last July for the establishment of a single resolution mechanism is very timely. The EC proposes the creation of a single resolution agency or authority, which would manage a common fund fed by contributions from the industry and ultimately report to the European Commission.
By offering settlement in central bank money, TIPS increases the speed and safety of customers’ daily transactions.5 Since 2016, the ECB has also been exploring the application of new technologies, particularly distributed ledger technologies, to market infrastructures. Together with the Bank of Japan, the ECB is conducting a research project called “Stella” which is investigating innovations that can facilitate safer, faster and cheaper financial transactions.6 But driving change also means identifying and managing the risks that come with breaking new ground. Innovations – including stablecoins – will only be beneficial if the associated risks are mitigated through effective regulation and oversight. So I believe we should follow the golden rule of supervision: “same business, same risk, same rules”. We must ensure that stablecoins do not compromise the safety and efficiency of the payment system or the soundness and stability of the financial and monetary system. And this is all the more important for stablecoins with a global reach. The G7 Working Group chaired by my fellow Executive Board member Benoît Cœuré has made clear recommendations with a view to developing a globally consistent approach to their regulation and oversight.7 As it did for the General Data Protection Regulation, the European Union can show the way here. In line with international standards and recommendations, we – and here I count on you as colegislator – should develop and enforce regulation that strikes the right balance between supporting innovation and addressing risks.

If the government itself is already heavily indebted or has incurred a huge amount of debts after bailing out the private sector or introducing measures to stimulate the economy, the market may start to doubt the sustainability of its fiscal position. A case in point is Ireland, where the government incurred a huge amount of liabilities by bailing out the banking system, calling into question the government’s fiscal sustainability and triggering the sovereign debt crisis. (f)  The crises unfolding in the US and Europe are not new to Asia. This region had its share of suffering during the Asian Financial Crisis of 1997/1998. In Hong Kong we went through almost seven years of painful economic adjustment after the burst of the property bubble in late 1997. Our economy shrank by 8.7% in five quarters. Unemployment increased fourfold from 2.1% to 8.5%. Property prices dropped by 70% in six years while the general price level fell by 15% in five years. The hard lesson we learned from our experience is to face the reality, take the pain in stride and do whatever it takes to restructure the economy, to increase productivity and improve competitiveness. If this can be done, it should be possible to return to the track of sustainable economic growth. BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5
We intend that the digital pound would have the same (or stronger) privacy protections as bank accounts, debit cards or cheques which are now used for 85% of transactions in the economy. Individuals’ personal details and transaction records would be known only to their private sector wallet provider in the same way they are for bank account providers today (and subject to the same privacy protections). But individuals’ details and records would not be known by the Government or the Bank of England. In this way, the digital pound would provide privacy while also protecting against fraud and financial crime. The digital pound would not be an anonymous bearer instrument like cash, but physical cash would remain available to those who wanted to use it. Neither the Government nor the Bank would program a digital pound or restrict how it was spent. Instead, the Bank would provide the infrastructure and minimum functionality for the private sector to provide programmability features for users. Those features would require user consent. As with banknotes and many current accounts, no interest would be paid on a digital pound. Its purpose would be as a means of transaction - to make and receive payments - rather than as a savings product. Nor do we see the digital pound as a monetary policy instrument and as such it would, like cash, have neither positive nor negative remuneration.

For example, the firm might notice that the yield on corporate bonds relative to Treasury yields was higher than the range observed in recent years. If Long-Term Capital believed the former relationship would reassert itself, it would buy corporate bonds and sell short Treasury bonds. If the spread narrowed as expected, the firm would profit. If, however, the spread continued to widen, the firm would incur losses. This basic strategy and many complex variations was followed across many interest rate products in the US and many overseas markets as well. The firm was active both in traditional securities markets, and perhaps more importantly, in derivative product markets such as futures, swaps, and options. Anticipating that some positions would move in their favor and some would move against them, the firm relied on diversification across a large number of product and geographic markets. Long-Term Capital proved quite successful at this strategy, generating returns in excess of 40 percent in 1995 and 1996, though somewhat less in 1997. Perhaps their success went to their heads. Long-Term Capital took on larger and larger positions. They also leveraged their investments at higher levels, returning capital to their investors but not, apparently, reducing risks. We now also know that they took on significant positions in equity markets, through both swap and options contracts. The reputations of the Long-Term Capital partners, as traders and economists, and their initial success, appear to have contributed to so many counterparties’ willingness to deal with them.
Chart 11: Common component in asset  Chart 12: VaR vs CoVaR for a selection  prices  (a)  of major UK banks, post crisis Per cent 70 60  VaR Post Crisis 25 Median CoVaR Post Crisis 20  50 15 40 30  10  20  5  10 0 0 98 99 00 01 02 03 04 05 06 07 08  Sources: Bloomberg, Merrill Lynch, and Bank calculations. (a) Proportion of variation in global equities, emerging market equities, high-yield spreads and commodities explained by a common component over a three-month rolling window.

In some, the financial authorities might decide the scale of the haircuts/conversions; perhaps in other countries, it might be thought that a senior judge should decide on the basis of an application by the financial authorities. It is also worth saying that maintaining an LCFI in business through such means would neither preclude nor of itself require regulatory action against management or, once the crisis had passed, to wind-down parts or all of the business over time. Nor would a regime of the broad kind I have sketched exclude restructuring banking groups into functional subsidiaries, with different resolution tools applied to, say, deposittaking/payments; custody and global cash management; the business of illiquid lending to small and medium-sized enterprises and households; trading/derivatives business or wholesale banking more generally. That would not be inconsistent with reducing the number of legal entities in LCFI groups, perhaps by an order of magnitude. The current FSBsponsored work to develop “recovery and resolution plans” for the top 25 or so LCFIs is designed to identify where those kind of steps are warranted. Resolution could, therefore, take its place alongside structure and regulation as one of the key elements of a reform package to strengthen the global financial system. A super-special resolution regime along those lines would, on the face of it, go quite a long way towards reintroducing market discipline – by putting uninsured creditors at risk even in systemic situations. I am not innocent enough in the ways of the market to think that it wouldn’t affect behaviour.
Even if some progress has been made, it is likely that no comprehensive measures will be implemented until we have in principle left the crisis entirely behind us. We should not wait for this work to be completed in all areas. In several cases we should instead remedy deficiencies as quickly as possible and improve our own financial regulatory framework. More tangibly, we propose, for instance that the Sveriges Riksbank Act should be reviewed. This is with the aim of clarifying the Riksbank’s responsibility for financial stability and what tools the Riksbank needs to manage this task. There are several important issues in this field. For example, should it be explicitly stated in the Instrument of Government or the Sveriges Riksbank Act that the Riksbank has a responsibility for financial stability? I hope that we will fairly soon have the answer to this and other related questions. Another area concerns investigating how the allocation of responsibility and coordination between the Riksbank and Finansinspektionen can be improved. Moreover, the distribution of responsibility between the Riksbank and the Swedish National Debt Office with regard to loans to the foreign currency reserve should also be made clearer. A further question is the one I raised just now, namely that an efficient regulatory framework is needed for managing banks in distress. Concluding remarks Let me finish where I began. We are on safer and firmer ground now than we were a few months ago. The acute crisis is behind us.

The TED spreads have gradually fallen and for some time have been at around the same levels as in summer 2007, before the financial crisis became acute. Although measures such as the central banks’ loans to the banks have probably played a role here, the low TED spreads indicate increased confidence and a more stable situation in the interbank market. 2  BIS Review 25/2010  Figure 2 More stable situation in the financial markets The difference between interbank rates and government bond rates (TED spread), basis points  Sources: Reuters EcoWin and the Riksbank  Another healthy sign is that individual problems have not spread exaggerated unease in the financial markets around the world. I refer here to Dubai World, for instance, which defaulted on its payments earlier in the winter and has since suffered new problems, and to Greece, which is struggling with very poor public finances. A further example is the economic problems in the Baltic countries. While these events are reminders in themselves that we still have some way to go before we can declare this crisis completely over, if the same things had happened in autumn 2008 the waves of turbulence would probably have been much higher and affected markets far from the eye of the storm. We are now on firmer ground – or on safer ice, if you prefer. A further positive sign is that activity in the financial markets has increased after being very low in some cases, particularly during the most intensive phase of the crisis.
Speeches 31 Oct 2022  Opening Keynote at the Hong Kong FinTech Week 2022 Eddie Yue, Chief Executive, Hong Kong Monetary Authority Innovation in action - looking back to look forward Introduction 1. Good morning, everyone. A very warm welcome to Hong Kong FinTech Week. 2. This is an exciting week for Hong Kong. For the first time in three years, we are welcoming many of our overseas friends to Hong Kong again for this Fintech Week and also the Global Financial Leaders’ Investment Summit and Rugby Sevens after that. This marks the beginning of our path back to normality, and all visitors can see and feel the vibrancy and dynamism of our city. 3. Part of this dynamism comes from the fast-growing fintech ecosystem in Hong Kong. Innovative fintech firms are exploring ways to drive the momentum towards an even more tech-enabled financial industry. Many are looking at how to make use of the fastevolving blockchain protocols to create products or services through crypto, stablecoins, NFTs, DeFi and the metaverse. 4. Some financial institutions are already using elements of the metaverse for brandbuilding and customer education; and it will be fascinating to see whether and to what extent the metaverse can form a new landscape for real-world financial activities one day. I hope the opening you just saw illustrates how the metaverse can mirror – and even improve on – reality. For example, my avatar definitely looks cooler, and is obviously a much better table tennis player than the real me. Looking Back 5.

And to help us navigate this long, winding and foggy road, we should take a pause and look back, and ask ourselves what we did well, what we could have done better, and how to do things better in the future. 10. Today I would like to take this opportunity to share three reflections with you. I won’t pretend that these are in any way definitive. But these, I believe, are the key takeaways from our experience so far. Radical Open-Mindedness 11. The first reflection is the need for radical open-mindedness, a term that I borrow from Ray Dalio, who used it to describe idea generation in investments. I would say this is even more applicable to fintech innovation – we need to be radically open to new ideas and try things that could make the financial system better. 12. When we brainstorm ideas for new fintech projects, we usually won’t know where they will lead us. The only sure thing is that if you don’t try, you never get anywhere. The key is to learn from failure and move on. This mindset has gotten us the hugely popular FPS, eight virtual banks and a vastly more advanced data-sharing infrastructure in our financial system. 13. In the beginning we were sometimes a bit resistant, wondering how new creatures like crypto, stablecoins, DeFi and other blockchain-based innovations can fit into “mainstream finance”.
As always the great strength of the MPC is that while we bring different perspectives on the best way to get there, we share a common goal, consistent with our remit, of returning inflation sustainably to the 2% target. And as always I am looking forward to our debates and discussions as we prepare to publish our latest map of where we are heading in the form of our August forecast. 6  I covered this in detail in my speech last October, ‘The Monetary Policy Toolbox in the UK’. 14  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  14

Stefan Ingves: Banking reforms Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at a seminar arranged by the Bank of Spain together with the IMF for ministers of finance and central bank governors from North Africa and the Middle East, Toledo, Spain, 3 November 2006. *  *  *  Thank you for inviting me to speak at this seminar. The topic for this session reflects that the ever ongoing changing circumstances, such as globalisation and integration of markets, make old structures and approaches obsolete and call for reforms. The title of today’s seminar is “Reform strategies for central banks and banking systems in North African and Middle East countries”. Since I do not believe in a top down approach where the authorities dictate the structure and details of a banking system, I would prefer to approach the issue by discussing how the authorities should establish a framework which promotes the growth of a modern banking system. Such a framework includes several components such as modern legislation and regulation, supervision, a financial safety net – in addition to the obvious centrepieces, namely the banks themselves and a central bank that conducts market-based monetary policy. I will discuss a number of components which are necessary in a modern banking system to make it efficient, while at the same time flexible to accommodate developments and resilient to promote financial stability.