samchain/econo-pairs-v1 huggingface dataset:
The prolonged period of unusually low inflation during past decades allowed central banks to conduct extremely accommodative monetary policies for a very long time. This has contributed to a significant buildup of global financial vulnerabilities, including stretched valuations of risk assets, high house prices, and record high private and public debt.1  •  For small open economies, especially those from emerging markets, the challenge is to maintain stability in the face of more volatile capital flows, large swings in exchange rates, and tighter global financial conditions. The steep appreciation of the US dollar poses significant risks, particularly for those countries with high external vulnerability. Many have had to follow the aggressive tightening of policy by the Fed. •  That said, the overall repercussions of advanced economy policy tightening on global financial markets have--thus far--been remarkably orderly. There have been no major dislocations in emerging market capital flows and there has been clear differentiation based on country-specific fundamentals. Asian economies overall have exhibited resilience. Capital outflows have been less  1 In Q1/2022, global house prices, in nominal terms, are rising at a rate of 10.2%, in real terms (once adjusted for inflation) is closer to  3.3%. The rate of real house price growth has now declined for two consecutive quarters (Figure 2).

First-generation crypto-assets were born of a desire to create a disintermediated means of payment that would not have an issuer and that would circulate on decentralised settlement infrastructures beyond the control of banks and governments. As a result of this, their actual footprint remains marginal, however much media attention they may receive. Furthermore, as intermediaries in exchanges, these assets are far less efficient than our existing currencies, for a variety of reasons, including their volatile prices, transaction costs and transaction times, which make it hard to use these assets as a means of payment, plus the risks to which users and service providers are exposed. Stablecoins seek to remedy the shortcomings of first-generation 1/4  BIS central bankers' speeches  crypto-assets, especially their volatility, by being backed by real assets. But even with Stablecoins, the whole crypto-asset payment chain remains highly exposed to a range of risks, from legal, financial and operational risks, to major vulnerabilities in terms of money laundering and terrorist financing, and consumer and investor information and protection issues, including a non-zero risk of capital loss even in the case of Stablecoins. There are also issues, in our countries upholding the Rule of Law and in our regulated market economies, in terms of complying with core competition and privacy principles.
A number of recent efforts have been undertaken to modernize the Poole model by adding interest on reserves and other features of modern money markets. Two notable examples of this are Schulhofer-Wohl and Clouse (2018) and Afonso, Armenter, and Lester (2018). 17 Alternatively, it could be that banks are more efficient in their balance sheet management, which would be consistent with the lower volatility in overnight rates we have seen at recent quarter-ends. Bargaining dynamics within overnight money markets, which exhibit a fairly high degree of concentration of both borrowing and lending, could also have played a role in the rise over time in market rates relative to IOR. 18 For a further discussion of the shape of the demand curve for reserves and its implications for policy implementation, see Logan, “Operational Perspectives on Monetary Policy Implementation: Panel Remarks on The Future of the Central Bank Balance Sheet,” May 4, 2018. 19 In the spring there was an increase in borrowing in the federal funds market above IOR, but volume in the Eurodollar market decreased around the same time. 6  Let me offer some caveats to these observations. Money markets have been and are now changing quickly in response to regulatory, technology and business model incentives. 20 At the same time, reserves in the system have been abundant because of the asset purchase programs— perhaps smoothing through the effects of some of these changes.

Staff at the Federal Reserve has been using new data sets, analytics, and extensive market intelligence to deepen our understanding of the impact of these changes on money market dynamics. What follows is an illustration of this enhanced understanding. In the pre-crisis monetary policy framework, banks’ regulatory obligation to hold reserves was primarily driven by the required reserves framework, set forth in the Federal Reserve Act and Regulation D. 21 This framework involved banks meeting their requirement over a 14-day reserves maintenance period, as well as various other incentives that promoted short-term, but not extremely high-frequency, bank balance sheet management activity to maintain reserves at required levels—and the Federal Reserve had built analytics to provide good visibility into it. Today, while the Regulation D framework is still around, it is no longer likely to be the binding constraint on reserve levels for most large banks. 22 The new factors driving reserves demand appear to vary by financial institution, and seem to depend on a complex interplay of numerous new features of the financial system. On the regulatory side, these include the Liquidity Coverage Ratio (LCR), banks’ internal stress tests of their liquidity adequacy, supervisory expectations related to banks’ ability to monetize their liquidity portfolios during periods of financial stress, and the incorporation of liquidity into resolution planning. Other important factors include increased bank aversion to incurring intraday overdrafts, higher bank investor and creditor expectations for liquidity, and a lower opportunity cost of holding reserves relative to before the crisis.
A study by the Asian Institute of Finance in 2015 found a majority of youth to be living on high borrowing costs – 38% of youths rely on personal loans, while another 47% engage in expensive credit card borrowings. Often, they will soon find these debts to be burdensome and result in financial problems. From January to August this year, AKPK’s data indicated that above 3,400 borrowers between the ages of 20– 30 years have sought AKPK’s assistance, as compared to 3,450 borrowers for the entire of 2016. Third, majority of Malaysians do not practice long term financial planning. Only 40% of Malaysians consider themselves financially ready for retirement, despite the steadily increasing life expectancy of Malaysians. The poverty line in Malaysia is currently at RM950 per month, and based on the Employee Provident Fund (EPF), a retiree would need an estimate of RM228,000 upon retirement to generate sufficient investment income to live above the poverty line for the 1/4  BIS central bankers' speeches  next 20 years. However, according to Khazanah Research Institute, the average EPF savings of those in the 51–55 age group is only approximately RM160,000. Lack of awareness on the importance of having sufficient saving for retirement can lead to profound results, including the struggle to meet post-retirement standard of living. Fourth, Malaysians still lack understanding on risk and return and are not able to make rational financial decisions. We remain prone to financial fraud and abuse.

Today, I would like to share with you – our vision to realise financial well-being for Malaysians through financial literacy and financial education. Let me begin by sharing four observations on the state of financial literacy in Malaysia. First, Malaysians tend to have low financial resilience and are vulnerable to financial shocks. Among others, based on Bank Negara Malaysia’s Financial Capability and Inclusion (FCI) Survey conducted in 2015- more than 75% of Malaysians find it difficult to raise even RM1,000 of immediate cash money for emergencies. 32% of Malaysians – can only cover a week’s worth of expenses, at most, should they lose their source of income. In cases of emergencies, Malaysians resort to cutting down on spending; or borrow from external sources, such as friends and family members; or even depend on credit lines, such as credit cards and instalment plans. An ideal situation is to have a financial buffer that is sufficient to cover living expenses of at least three to six months in the event of loss of income. Second, the same survey also revealed that a significant number of Malaysians like to “live for the moment” and display short-sighted tendencies – focusing on “instant gratification”. This observation tends to be true, particularly among the millennial generation. Millennials are more passionate in keeping pace with the latest digital lifestyle.
In addition, I should point out that, like the ECB, we resolutely support the initiative recently launched by the European Securities Markets Authority (ESMA). As the regulator of rating agencies, ESMA is seeking to establish guidelines so that these entities make public the way in which they incorporate sustainability elements into their valuations. To conclude, allow me to reiterate the importance and scale of the challenge we face. It may sound clichéd; but it is nonetheless true that we are not only talking about our well-being, but the well-being of future generations who may be left with little leeway if we are not sufficiently ambitious. The challenge extends to all agents and sectors, and proof of this is the broad and varied representation here in this room today. The financial sector undoubtedly has a notable responsibility in this challenge. In our capacity as financial authorities and under our mandate, we can and must do everything within our power to properly value, manage and mitigate the risks associated with climate change. The challenge is paramount and the need for coordination – with other national and international authorities – enormous. But I believe that, if we have been capable of structuring an appropriate regulatory response to the international financial crisis, we will also be capable of rising to the challenge here. I think that the measures rolled out from Europe will ultimately be an international reference and standard.

Along with reflecting the risks, the agreement explicitly acknowledges how important the financial system should be for efficiently channelling the resources needed to transform our economy towards a sustainable model. These two factors, namely the risks and the opportunities and incentives associated with the change in economic model to combat climate change, have grown in significance on international financial agencies’ agendas. Allow me to mention, non-exhaustively, some of these initiatives: - the work on sustainable finance during the last three mandates of the G20, - the establishment of responsible investment principles by the United Nations, - the creation of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, - the establishment of the OECD green finance and investment centre, - the Sustainable Banking Network established by the World Bank, - within the EU, the European Commission’s action plan on sustainable finance - in the central banking and banking supervision environment, the work by the Network for Greening the Financial Sector (NGFS), of which the Banco de España is a member. In sum, the Paris agreement message to involve the financial sector has hit home and is prompting numerous courses of action. 3/5  You will be discussing many of these initiatives at length in the ensuing roundtable. But in the rest of my speech I wish to briefly set out the role the Banco de España, as a central bank and as a supervisor, can perform regarding this collective challenge.
Twenty-five years from now, I am confident that one of my successors will be able to look back and explain in his or her Mais Lecture the great improvements that took place between 2005 and 2030. But I like to think that the inflation target framework has the ability to serve us well over that period. Thirty years ago the theory of monetary policy was ahead of its practice, at least in the United Kingdom. Now I hope that the practice has given the theorists something to think about. Table 1: Inflation targeting countries Country New Zealand Chile Canada Israel U.K. Sweden Finland Australia Spain Czech Republic Korea Poland Mexico Brazil Colombia South Africa Thailand Iceland Norway Hungary Peru Philippines  Adoption of Inflation Targeting Dec. 1989 Jan. 1991 Feb. 1991 Jan. 1992 Oct. 1992 Jan. 1993 Feb. 1993 Mar. 1993 Jan. 1995 Apr. 1998 Apr. 1998 Oct. 1998 Jan. 1999 Jun. 1999 Sep. 1999 Feb. 2000 May 2000 Mar. 2001 Mar. 2001 July 2001 Jan. 2002 Jan. 2002  Source: Truman, Edwin (2003), Inflation Targeting in the World Economy, Institute for International Economics, Washington DC. The table not only includes current inflation targeting countries, but also Spain and Finland, which have since joined EMU.

There will inevitably be elements of tough love in such a process, and some disappointed ambitions, but I am confident that out of it will come a robust form of innovation. I hope also that laying out the principles of public interest and how they should be put into practice in the context of new innovation will help to deal with another difficult and perennial challenge of financial regulation. It is in the nature of innovation – and a good thing – that while some ideas succeed, many fall by the wayside. How many people remember Visi On, TopView and GEM? I have to admit I did not until I did some research for today. In the mid-1980s, they were rivals to Windows for the personal computer software market. More precisely, they were briefly rivals, but the rest as they say is history, as were these three rivals. In our world of finance, things can be more complicated, because dealing with failures itself raises public policy issues. There are quite often suggestions that central banks and financial regulators are anti-innovation and lukewarm on competition, because the results will at times be messy as the winners emerge and the losers fall by the wayside. We are not anti-innovation or anti-competition, but we are trying to manage our sphere of influence in order to achieve our public policy objectives, as required by Parliament and serve the public interest continuously. With that in mind, let me apply the framework to the world of payments and digital currency.
CBRT Interest Rates (Percent) Non-CBRT Average O/N Funding Rate in BIST CBRT Average Funding Rate 1 Week Repo Rate Late Liquidity Window  14 13 12 11 10 9 8 7 6  02.17  01.17  12.16  11.16  10.16  09.16  08.16  07.16  06.16  05.16  04.16  03.16  02.16  01.16  5  Source: TURKSTAT, CBRT. I would like to underline that the recent policy we have been implementing is not equivalent to the previous discretionary monetary policy under a flexible corridor framework where the policy stance shifted at daily and weekly frequencies. This is a clear and stable policy tightening which will be preserved until we see a considerable improvement in medium term inflation dynamics. The significant tightening in the monetary policy stance can also be observed directly by looking at the yield curves. The left side figure shown below compares the most recent yield curve with the one materialized in early January, right before the CBRT response (Figure 13). It is clear that the short-end has shifted up and the longer-end has fallen, which is a typical response after a credible monetary tightening. As another indicator of the monetary tightening in time dimension, the 9  right side figure below shows the evolution of the slope of the yield curve at the cross currency swap market, which also clearly reveals a flattening in the yield curve (Figure 14). Figure 13. Figure 14.

Suhaimi Ali: Leading the change - empowering small businesses to tackle climate change Opening remarks by Mr Suhaimi Ali, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Greening Value Chain (GVC) Programme Rollout, Kuala Lumpur, 7 March 2023. *** Assalamu'alaikum and a very good morning to distinguished guests. Let me begin by congratulating Kossan Rubber Industries Berhad and Pantas Sdn. Bhd. for the timely rollout of the Greening Value Chain programme. It is no doubt that climate change is accelerating. Dangerous weather events are becoming more frequent and extreme, and global CO2 emissions are starting to rise as economies pick up speed post-pandemic. As we gather here today, floods caused by heavy rainfall have been reported across several states in Malaysia. With the climate crisis upon us at such a pace, accelerating our actions in responding to climate risk becomes all the more urgent and necessary. Ladies and gentlemen, We are on the edge of a climate precipice, close to reaching a 1.5C tipping point, beyond which the damage to our environment would be irreversible. The increasing frequency of natural disasters also provides a grim teaser of what lies ahead if we do nothing. Recognising this urgency, more than 70 countries have set net zero Greenhouse Gas (GHG) emissions targets1, and more and more businesses are also making commitments to reach net zero GHG emissions by mid-century. Based on projections, climate inaction would cost the global economy USD 178 trillion over the next 50 years2.
One important dimension of the risk is determined by the ability of the countries in which the banks are active to cooperate in a crisis, and the subsequent division of burdens. This issue deserves a lecture all of its own, so I will spend no more time on it today. Another dimension is that of funding, particularly how much funding is borrowed outside the countries in which the banks operate. And this is the aspect to which I would now like to return. 6  BIS central bankers’ speeches  What matters are how the banks borrow and how they use this money Of course, not all borrowing in foreign currency is a cause for concern – on the contrary. In many cases, it forms a natural part of traditional banking operations. And neither is it particularly remarkable to borrow in one currency and then exchange this for another on the market. But one of our experiences from the crisis is that it does make a difference both how you borrow and how you use this money. Let me start with how borrowing is conducted. Put simply, it could be said that the Swedish banks borrow over the short term in dollars and over the long term in euros (see Figure 7). The market for short-term borrowing is very large in the United States and, both before and after the crisis, the Swedish banks have been able to obtain significant volumes of funding on this market at favourable conditions.

As the Swedish banks have grown so rapidly in recent decades, mostly by expanding overseas, it would not be out of place to ask whether they have become too large for Sweden. Is there, perhaps, a limit for how large a banking system can be in relation to the total production capacity and fiscal capacity of one country? The risks for society may, quite simply, become too high. Experiences from Iceland and Ireland during the last crisis undeniably suggest this. And the Swedish banks are certainly large. The combined balance sheet totals of the major banks are equivalent to slightly more than four times GDP (Figure 6, left-hand diagram). This multiple is among the highest in Europe, in the same order of magnitude as the United Kingdom and the Netherlands (prior to the crisis, Iceland was in ninth place). However, I think that we should perhaps be cautious in assessing the risks in a banking system merely on the basis of the size of its balance sheets. For example, imagine that Nordea moved its head office from Stockholm to Helsinki, suddenly becoming a Finnish bank. This would take Sweden below the European average (Figure 6, right-hand diagram). Would the level of risk in the Swedish banking system then have decreased considerably? I don’t think so. The risks in a large banking system have many other dimensions than just balance sheet total in relation to GDP. Large banking systems can be associated with low risks and small banking systems can be associated with high risks.
Behaviour and culture influences operations at almost every levels within an organisation, ranging from decision making, strategic positioning, as well as risk appetite and risk taking. The risk-reward incentive structure has to focus more on long term gains rather than short-term profits, and the design of compensation scheme should fully reflect that aim. The strong culture of risk awareness and good governance should be rigorously instilled such that it becomes organisational culture and natural behaviour of bankers. Culture of transparency along with proper check and balance also contribute towards a solid foundation of banks’ immune system. The other area of immunity that will be key for financial institutions is immunity against cyber security risks. Everyone, every bank, every system must be prepared and ready to both prevent and respond effectively to cyber security risks. Incidents of cyber attacks, no matter how small, can undermine the integrity of the financial system. To boost the immune system, it is imperative that cyber resilience and cyber security be given the highest priority. Ladies and gentlemen, Financial stability could not exist without social stability, which brings me to my third and last point that requires collaboration from financial institutions. The economic benefit of growth has to be inclusive and financial system can play significant roles in promoting inclusive growth, starting with financial inclusion. The people at large must have access to basic financial products including payment, savings, credit, and insurance. The pricing has to be lower, choices wider, and access better.

Several inflation-targeting central banks (including the Bank of England, Norges Bank and the Riksbank) have for other reasons already extended their forecast horizon from the previously common two years to three years. There is nothing that in principle prevents an inflation targeter from considering forecasts beyond a three-year horizon, but in practice there is usually little information about anything at longer horizons except the tendency to revert to the long-term average. What about “leaning against the wind” (as advocated by, for instance, Borio and White, 2003, and Cecchetti, Genberg and Wadhwani, 2002), the idea that central banks should raise the interest rate more than what appears to be warranted by inflation and resource utilization to counter rapid credit growth and rising asset prices? It has sometimes not been quite clear whether advocates of leaning against the wind mean that credit growth and asset prices should be considered targets and enter the explicit or implicit loss functions alongside inflation and resource utilization, or whether they mean that credit growth and asset prices should still be considered just indicators and are emphasized only because credit growth and asset prices may have potential negative effects on inflation and resource utilization at a longer horizon. In the latter case, leaning against the wind is a way to improve the stability of inflation and resource utilization in the longer run. Then it is completely consistent with flexible inflation targeting.