samchain/econo-pairs-v1 huggingface dataset:
The market for information and statistics There are market based statistics-producers in developed countries. The market agents are ready to pay a price in order to acquire such statistics. The producers of statistics conduct frequent market surveys, analyse results, supply them on line at a price and help market agents to create wealth. Unfortunately, in Sri Lanka, we do not have such market based statistics-producers. The collection and analysis of vital data that are useful to market agents are being done by a few governmental organisations. Like any other product supplied by the government, such data are also supplied as a public good free of charge. Even when the governmental agencies could sell statistics at a price, they do not venture to do so, because they are guided by such principles as “doing utmost benefit” to people as a social service. The country too, therefore, expects free goods from these governmental organisations. But this creates a problem known as “the agent-principal problem” in economics. The agent-principal problem The agent-principal problem is typical to any government service. It says that the agent who is a government bureau or a department or even a university does not have incentive to produce its output at its best. The principal who is the user of the service, on the other hand, is scattered and not in a position to influence the agent to improve quality.

The types of misuse of statistics listed by Wikipedia are as follows:  2  BIS Review 36/2009  •  First, the statistician may discard the unfavourable data and make use only what is favourable for him to prove his point. •  Second, in field surveys, the statistician may ask loaded questions in order to elicit an answer of his choice. •  Third, the statistician may tend to over-generalise facts and make wrong conclusions. •  Fourth, the samples used may be biased. •  Fifth, the causality outlined may be fallacious. •  Sixth, the data may have been manipulated in order to show a result favourable to some interested party. •  Seventh, data may be dredged or mined in order to find a correlation that would not be there. How to gain credibility for statistics? All these instances of the misuse of statistics make the statistics less reliable and suspicious. The governmental statistical agencies throughout the globe are criticised by public on this ground. Once the organisations lose credibility regarding the compilation of statistics, it would be very hard to regain trust and confidence of users. The statistical bureaus run by former Soviet Union and its satellite states have been subject to this criticism. The way to avoid this criticism is to adopt global best practices with regard to compilation and dissemination of statistics. It requires countries to adopt a code of ethics and practices when it comes to dissemination of information.
What Hahn’s bit of rhetoric does suggest is that you need some sort of financial friction – some departure from the platonic realm of Arrow-Debreu – to explain why money might matter. Take, for example, the relationship that determines consumer spending in many models of the macroeconomy. Typically, this originates with a question: how would a forward-looking consumer, able to borrow and lend relatively freely, allocate his or her spending over time? After solving that stylised problem, and a bit of manipulation, you end up with something like this:  [1] Here, in what I’ve described rather grandly as equation [1], f(.) is some function of current and future (real) interest rates and the term in brackets is total wealth. Wealth has two components: net financial assets W (with an average real price p) and the present value of current and expected future labour income, or “human wealth” H. (In this set-up, greater “consumer confidence” can be thought of as a rise in those future expected incomes, and therefore this H term.) Higher real interest rates depress both p and H because they increase the rate at which future income is discounted. Because there’s only one market here (in borrowing and lending) the demands of this set-up aren’t quite as onerous as in Hahn’s “best developed model of the economy”, with its multiple barter exchanges. Nor do you have to assume that people can borrow and lend at precisely the same rate of interest (it does matter that they can do so at all).

The second question raised today is: What were the reasons for undertaking steps for financial sector reform? The recent financial crisis served as a reminder that the impaired financial system can have a significant impact on the functioning of the overall economy. Moreover, the 2007–08 financial crises was, to a great extent, a result of the failure of public authorities in the United States and Europe to adequately monitor and address systemic risk. By comparison, Asia and other parts of the world where memories of systemic financial crises were still fresh, had adopted more prudent policies and practices, and were less impacted by the subprimetriggered financial shockwaves. In order to make global finance more stable, the 2009 G20 summits in London and Pittsburg listed commitments on financial regulatory reform, pushing the financial regulation to the forefront of the global economic cooperation agenda at the level of political principles, which had until then, been mainly focused on trade and macroeconomic policy. The items on regulation can themselves be divided into two subgroups. On the one hand, the G20 decided to tighten or strengthen the regulatory framework applying to entities or activities that had already been regulated before the crisis.
In particular, there were three episodes between the mid-1970s and early 1990s, when inflation rose very sharply, and at around the same time output contracted. While there are many in the room that don’t need reminding, I thought I would just give the younger members of the audience a reminder of just how desperate those times were (Chart 1). In 1975, RPI inflation peaked just shy of a staggering 27% while at the same time output fell. It was this era that entrenched the term “stagflation” in the minds of the public. Inflation fell back sharply over the subsequent year or so, only to rear its head again in 1979-80 – this time peaking at around 22%. Once again output contracted and unemployment rose sharply (Chart 2). A third and final bout of rising inflation and falling output occurred in the early 1990s, with the unemployment rate once again rising above 10%. On average, inflation in the 1970s was around 13% and 7.5% in the 1980s. The UK macroeconomic framework Why was it that output and inflation were so volatile then and why has economic performance improved so much in the past 10 years? These questions are vital as we face more uncertain times ahead and to ensure that we avoid repeating the mistakes of the past. I would point to three main factors. There have been changes to the structure of the UK economy that have made it more flexible and adaptable.

Crucially we now have a credible framework for setting monetary policy to meet the inflation target in the medium term. Monetary policy cannot prevent the short-run ups and downs of economic cycles. In the current climate, the Committee believes that, if Bank Rate were set to bring inflation back to target too quickly, the result would be unnecessary volatility in output and employment. Instead we are focused on returning CPI inflation to the 2% target in around two years, when the present sharp rises in energy and food prices will have dropped out of the CPI inflation rate. We judge that in order for inflation to return to target it will be necessary for economic growth to slow this year, reducing the pressure on supply capacity of the economy and dampening increases in prices and wages. But the risks to both the upside and downside remain large and the MPC will continue to make its judgement about the appropriate level of Bank Rate month by month. The next year is not going to be comfortable for anyone and we already hear calls to change the system, the target, and our focus on inflation. But the new framework and the independence of the Bank was designed for difficult times as well as for plain sailing. I hope we can look to you and other businesses for support in doing what is needed to bring inflation back to target. BIS Review 80/2008  5  6  BIS Review 80/2008  BIS Review 80/2008  7
In these respects it is also possible to produce various numerical examples and simulations. Alternative assumptions can be made, for example, about what would be a reasonable exchange rate in the long run and test them against different underlying cyclical developments. An important issue for the Riksbank here is the effect on inflation. If it is found that inflation would be unduly high, for example, fiscal policy might have to be tighter. The interaction of the business cycle, for example, and the choice of fiscal policy and exchange rate can be studied in this way. The discussion would benefit from several independent analyses of this kind. Economic policy in ERM2  If Sweden becomes a full participant in the monetary union, the conditions for Swedish stabilisation policy will change. The task of conducting a stabilisation policy for Swedish needs would then rest - to the extent that it is considered desirable - entirely on the Swedish parliament or Riksdag and the Government. I want to underscore that this change already takes place essentially during the period in ERM2. It should be noted that a good state of readiness is absolutely essential. At the Riksbank we usually reckon that it takes between 1 and 2 years for changes in monetary policy to elicit their maximum effect on the rate of inflation. We do not know exactly what the corresponding time lag is for the real economic impact of fiscal policy.

Currently, 18 currencies are allowed to settle through CLS. The CBC along with CLS and the banking sector are working to make the CLP the 19th currency of this system. In addition to acting in accordance with its financial stability mandate and contributing to the development of the Chilean financial sector, the promotion of this initiative further support the internationalization of the CLP. Page 16 of 20  Central Bank of Chile September 2019  The reduction of settlement risk of the FX transactions through a PvP settlement in CLS is just one of the benefits of the system. Moreover, CLS reduce the liquidity needs of its participants through the use of multilateral netting, and enhance confidence, particularly in times of financial stress. From a more general perspective, a satisfactory CLS due diligence process along with a broad international participation trading in the CLP, will be a strong signal of the development and competitiveness of the Chilean financial markets. The process for the Chilean peso to become the first South American currency on CLS has started. Last July, we received the visit of CLS executives who had conversations with market participants and fruitful discussions at the CBC. After that visit, CLS and the CBC started the due diligence process. During this phase, the actions from the public and private sectors are essential. Nevertheless, a successful process should not be over before the end of 2021.
8 So, although we cannot entirely discount the role of monetary policy as a tool for averting financial crises, it is not reasonable to assume that monetary policy can do this on its own: 9 at least not without risking serious side effects in the economy as a whole. The repo rate affects the entire economy and cannot be directed at specific markets alone. It can thus have a negative impact on sectors that are not overheated. Increasing the repo rate in order to mitigate household credit growth and increases in housing prices also makes it more expensive for firms to fund new investments. In situations in which investment is low and unemployment is high this is something one wants to avoid. In such situations it would be inappropriate to use the repo rate as a means of pursuing macroprudential policy. My view is that it is only justifiable to use the repo rate in this way in cases where there is reason to believe that the central bank is the only body that can take measures to counteract what appears to be an unbalanced development. So what about fiscal policy? Can’t fiscal policy be used to counteract an unbalanced development? Yes, under certain circumstances. As I mentioned earlier, stricter budget discipline would probably have counteracted overheating in some European countries, but it could not of course have averted the financial crisis, which was largely “imported”.

The products we are getting ready to launch soon, that means the confidence indices, have to justify their designation. Stated differently, the public must believe the product of the Bank of Albania is reliable, that product is the object and the real indicator of the public’s expectations. In the meantime, we expect to have back the echo of the public’s trust. Wishing you all a fruitful working-day, Thank you! 2  BIS Review 118/2006
A central bank will also be keen to avoid the moral hazard involved in encouraging a commercial firm to undertake particular types of risk-taking activity. There are certain principles that a central bank should therefore observe: (1)  It should not lend to any bank whose prospective solvency is seriously in question. (2)  It should always take sufficient, good-quality collateral against its lending. (3)  Central bank operations should be designed to deliver public policy objectives, not to support the profitability of any particular commercial firm. 1  See the “The Framework for the Bank of England’s operations in the Sterling Money Markets (the ‘Red Book’)” at http://www.bankofengland.co.uk/markets/sterlingoperations/redbook.htm  2  See Fisher (2010), “Managing Liquidity in the System: the Bank’s Liquidity Insurance Facilities” at http://www.bankofengland.co.uk/publications/speeches/2010/speech450.pdf  BIS central bankers’ speeches  1  Bank of England consolidated balance sheet (a) Chart 1: Liabilities  Chart 2: Assets £ billions  £ billions  300  300 Notes in Circulation  Long-term repos 250  250  Short-term repos  Reserve balances Other liabilities  200  200  Loan to APF 150  150  Other assets  100  100  50  50 0  0 2006  2007  2008  2009  2010  2011  2006  2007  2008  2009  2010  2011  (a) Data to 16 March 2011  That may sound like a simple set of rules, but there are deep policy issues to consider when it comes to implementation.

And absent significant intervention from authorities here and in other countries, would have risked tightening financing conditions significantly and made the impact of the pandemic much worse. Tackling the causes of that is today a major area of work both internationally and domestically. For banks, we tested rigorously to ensure safety and soundness, and particularly that banks could support the economy through these very hard times. Indeed, we tested to make sure this support could continue through even harder times, and the answer was positive. This matters greatly because having a resilient system has meant that business lending could be sustained, and mortgage servicing pauses to support households seriously affected by Covid and its economic effects were extensively available and used, all to assist with dealing with the consequences of Covid. It has been the first major test of the post-financial crisis reforms to regulatory standards. In my assessment this outcome mainly passes the test of resilience, accepting both that we have work to do on the lessons from the dash for cash, and that we can never stand still because the positive benefits of innovation also create their own challenges. But, what is meant by the idea of resilience? A resilient financial system has the resources and flexibility to respond to a range of shocks of different sorts. In doing so, it will support stronger growth over the long-run, helping the economy to bounce back and reducing long-term economic scarring caused by the shock.
GFC also led to a fundamental shift in our approach to banking regulation and supervision, essentially by exposing the fault lines in the inadequacy of earlier regulatory architecture. 1 Keynote speech delivered by His Excellency Dr. Mohammad Y. Al-Hashel, Governor, Central Bank of Kuwait in the  14th High Level Meeting for the Middle East & North Africa Region, jointly organized by the Basel Committee on Banking Supervision, the Financial Stability Institute and the Arab Monetary Fund, on December 11, 2019 in Abu Dhabi, UAE. Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -2-  By now, those fault lines are well-understood. Banks held too little capital and of poor quality. Inadequacy of capital was further weakened by the absence of a backstop measure to contain excessive leverage. Banks that were too big to fail enjoyed the market power but were not required to internalize the cost of risks they brought to the overall system. Suitable measures of liquidity, in both funding and market sense, were lacking. And the efforts to contain systemic risk, both in its time and structural dimension, were hardly in sight. In a nutshell, the rule book was evidently deficient. And if that was not enough, banking supervision was micro prudential in nature. Supervisors believed that ensuring stability of individual institutions would make the system as a whole stable, thus largely ignoring the buildup of systemic risk. The GFC brought into sharp focus the gaps in our regulatory regime.

The nine MBS issues sponsored by the HKMC so far, totalling $ billion dollars, have all been guaranteed by the HKMC. These issues were all welcomed by investors. The HKMC prides itself on being a financial institution that spearheads product innovation in Hong Kong's capital markets. For this issue, after consulting the market, the HKMC has decided to adopt a MBS structure along the lines of a Collateralised Mortgage Obligation. The CMO structure divides the pool of underlying mortgage assets into credit tranches or classes with different tenors and interest rates to suit the appetites of a wider range of investors in Hong Kong and the region. In today's two billion dollars MBS issue, the Class A portion accounts for 87% of the issue and does not carry any guarantee. Class B accounts for 13% of the issue and is guaranteed by the HKMC. Class A has been assigned a triple-A rating by both Moody's and S&P's. The award of this top rating to Class A reflects the good credit quality of the underlying mortgage pool and the credit enhancement through subordination provided by Class B, which absorbs the first loss in the mortgage pool. The low level of subordination at 13% reflects the high quality of the collateral, the innovative structuring of the issue and market's confidence in the HKMC's ability to manage the credit risk of the mortgage portfolio.
Even disastrously, the under-employment in agriculture in Sri Lanka is not only the highest but also on the increase. According to the Consumer Finances and Socio-economic Survey of the Central Bank, the underemployment in the agriculture sector in 1996/97 stood at 31 per cent of the employed and it rose to 36 per cent by 2003/04. In contrast, the underemployment in the services  2  BIS Review 116/2008  sector fell from 20 per cent to 18 per cent between the two reference periods and that in the industry remained unchanged at 20 per cent. This has to be seen as both a weakness and an opportunity. We know that food prices have recorded an unprecedented increase in recent times. Hence, there are immense opportunities arising from increased prices and resultant increase in production. At the same time, food security has to be ensured in order to avoid adverse consequences of increased food prices and also undue declines in stocks. Given these limitations, the obvious strategy is to increase productivity. Accordingly, attempts need to be made to concentrate on land, water, agricultural methods, seeds, harvesting, credit to agriculture, transport, harvesting storage, stable prices, value addition etc. to raise productivity in agriculture. If the growth is constrained by limited expansion in agriculture, can’t we focus more on the industry sector? Of course, we can. Unlike the agriculture, which is constrained with limited land availability, industry does not have capacity or demand limitations.

This support was embodied and exemplified as early as 2014 with the signature by the Banque of France of two memorandums of understanding with the HKMA and the People’s Bank of China. ***  Cooperation will also prove invaluable in the face of the uncertainty caused by structural challenges. A first structural challenge is the digital revolution. The digital revolution is being fuelled by a wave of cutting-edge technologies, but also by the surge of new players. This new competition is being driven by fintech start-ups, but also, more importantly, by tech firms that have started to expand into the financial sector. Here in Asia, you can testify as to just how rapidly big tech firms can impact the financial sector. While ensuring a level playing field between competitors, our role as a central bank and supervisor is to guarantee that the digital revolution eventually delivers on its promises regarding increased security and efficiency. At the same time, incumbents should be prepared to adapt. Their business models are being challenged by the unbundling of financial services and by increasing customer expectations in terms of responsiveness and autonomy. The answers are not easy and cannot be uniform, but I expect that only the most digitally agile financial companies will eventually prove financially resilient. Against this background, France has many assets that can make it a leader in digital innovation in Europe, and the Banque de France is committed to playing its part in this regard.