samchain/econo-pairs-v1 huggingface dataset:
Or if I may paraphrase the title of Reinhardt and Rogoff’s best-seller, is this time any different? To make it truly different we need to take action. And we need to take action on different battle fields. 3. Adapting risk management to a new economic and financial environment  We need to start adapting our risk management frameworks to a new economic and financial environment. Public authorities need to incorporate the lessons from the crisis into the regulation in a meaningful manner. Among the different regulatory measures that need to be taken to prevent similar crisis in the future let me mention the following: 1.  promoting sound risk management practises and better integrating the risk management function into the decision-making process of agents;  2.  addressing the challenges posed by “too-big-to-fail” institutions and the related moral hazard;  3.  enhancing the global financial infrastructure to make it more robust to crisis, by promoting instruments and initiatives to mitigate counterparty risks and limiting the channels of contagion of firm- or sector-specific shocks;  4.  further encouraging transparency, fair valuation and standardisation in the elaboration of financial statements; and  5.  redesigning regulatory policies and capital requirements to avoid procyclical effects, for instance by introducing dynamic provisioning mechanisms as well as liquidity and funding requirements. The implementation of changes to the international banking regulatory standards as proposed in the Basel III accord will represent a key milestone in this regard.

BIS central bankers’ speeches  5  How could we be ready for the unthinkable if we were not even ready to assimilate past experiences? Some have said that standard risk management models could not capture a “black swan” event. Well, in some cases they could not capture a white swan either. In this regard, stress testing is seen as one of the core elements of a modern risk management function. The design of plausible yet demanding (forward-looking) stress tests both at the business area and at a firm-wide level can significantly contribute to understanding the sources and the consequences of the risks faced by the different institutions. One of the key lessons that we have learned from the crisis is the interaction between different types of risk. This interaction sometimes leads to compounding effects that were not properly captured by the risk management tools available before the crisis. A comprehensive risk management framework should therefore not only be firm-wide, but also encompass and aggregate in a meaningful manner the different types of risks to which a specific firm or institution is exposed. We need to pay attention to inter-risk correlations (i.e. the interaction across different types of risks), as much as to intra-risks correlations, and build a portfolio that is as diversified as possible on both dimensions and that matches our hedging needs or our risk-return preferences. But the single most valuable lesson that we have recently learned is that crises are more frequent than what we tend to think.
But at least they provide a conditional assessment of how much we expect our rates to increase in order to bring down medium-term inflation to our 2% target. 11  See Brainard, W. C. “Uncertainty and the Effectiveness of Monetary Policy”, American Economic Review 57 (2), pp. 411–425, 1967. 12  It will depend on the degree of persistence of the shocks that hit the economy, as shown by Ferrero, G., M. Pietrunti, and A. Tiseno. “Benefits of gradualism or costs of inaction? Monetary policy in times of uncertainty”, Banca d’Italia Temi di Discussione (Working Paper) No 1205, 2019. 13 See Söderström, U. "Monetary Policy with Uncertain Parameters," The Scandinavian Journal of Economics, vol. 104(1), pages 125-145, 2002. 6  Banco de España staff have conducted such an exercise using a suite of macroeconomic models. The exercise assumes that ECB rates increase linearly until March 2023, and then stay there for most of 2023 and 2024.14 The level of short-term interest rates in March 2023 consistent with a 2% projected inflation rate by end-2024 would be the terminal rate. The results show that, on the basis of current information, the median terminal rate value across models is at 2.25%-2.50%. Indeed this is estimated with significant uncertainty, as illustrated by the wide range of the estimated terminal rate across models15. Let me emphasise, in particular, that these models cannot capture the risk of expectations becoming unanchored or the severity of second-round effects and how they are affected by changes in the terminal rate.

The aim is not to infringe on FINMA’s jurisdiction. Instead, FINMA and the SNB need to clearly define how the new responsibilities and tasks arising from the urgent need for more rigorous analysis and regulation of systemic risk should be divided between them. At this point, I also want to stress that this macroprudential task does not call into question the SNB’s primary mandate, which is the maintenance of price stability. Instead, it supports the long-term fulfilment of this mandate. The SNB has also expressed its opinion – along the lines of this proposal – on the recommendations made by the business audit commissions of the National Council and the Council of States in their report on the financial crisis. 2  BIS Review 173/2010  SNB balance sheet risks In my following remarks, I would like to look at the SNB’s balance sheet risks. As the Chairman of the Governing Board, Philipp Hildebrand, has already mentioned, it was primarily the large-scale purchases of foreign currency that contributed to the expansion of our balance sheet to its current level of approximately CHF 280 billion. Of this amount, CHF 260 billion is made up of currency reserves, which comprise not only foreign exchange, but also gold and the IMF’s special drawing rights. If we add to that the SNB’s loan to the stabilisation fund, over 95% of our assets are denominated in foreign currency. Not only is the balance sheet longer as a result, it also carries more risk.
The novelist William Makepeace Thackeray called it “as grand a painting as ever figured on the walls of any academy, or came from the easel of any painter.”6 In 2005, was voted Britain’s greatest painting in a BBC poll.7 The quote – “Light is therefore colour” – is from an 1818 lecture by Turner. It refers to his innovative use of light, shade, colour and tone – one example of his unquestioned contribution to the visual arts in Britain and beyond. Turner rarely signed his paintings, so the signature on the banknote was taken from his will. It is fitting because, in that document, he bequeathed his paintings to the nation – a wider contribution to British society. Most Turners are not locked away in private collections or spread to the four winds. They are free for the British public to see across some of our greatest museums. And finally, Turner’s legacy endures. From his influence on art for more than two centuries, to the prize that bears his name and celebrates British contemporary art – indeed, to this magnificent gallery, the Turner Contemporary. It is fitting we are here in Margate, where Turner visited frequently throughout his life. This gallery stands on the original site of Mrs Booth’s seafront guest house, where Turner stayed whenever he visited.8 More than 100 of his works were inspired by the East Kent coast, and he held that “the skies over Thanet are the loveliest in all Europe.” ***  6  P. Ackroyd, Turner (Vintage, 2006) p. 136.

It bridges time. The money we spend today could have been earned from past accomplishments or could be borrowed from future ones. Money is also Memory for a country and its people. Money, after all, can be a piece of art in everyone’s pocket. Far from being “barren”, our banknotes are a celebration of the UK’s heritage, a salute to its culture, a testament to the great achievements of its most notable individuals. In short, money has not just economic value; it has cultural value. By depicting characters on our banknotes, we celebrate those who have advanced British thought, spurred innovation, shown exceptional leadership, shaped this diverse society and forged our common values. The great statesman Sir Winston Churchill will feature on the next £ note, unveiled on 2nd June, and issued in September, replacing the prison reformer Elizabeth Fry. The renowned author Jane Austen will feature on the £ note, which will be issued in 2017, replacing the ground-breaking scientist Darwin. 1  Hicks, J R (1967), Critical Essays in Monetary Theory. 2  “I am what I am” or “Stupid is as Stupid Does”. 3  A moniker used by Kocherlakota. See Kocherlakota, N (1998), “Money is Memory”, Journal of Economic Theory, 81 (2). 4  Book I, Chapter 4 “On the Origin and Use of Money” of Smith, A (1776), An Inquiry into the Nature and Causes of the Wealth of Nations. 5  Kocherlakota (Ibid.)
Lim Hng Kiang: Growing Singapore’s vibrant insurance industry Speech by Mr Lim Hng Kiang, Deputy Chairman of the Monetary Authority of Singapore and Minister for Trade and Industry, at the General Insurance Association 40th Anniversary Dinner, Singapore, 26 October 2006. *  *  *  Mr Derek Teo, President, GIA Distinguished guests, ladies and gentlemen  Introduction I am happy to be here celebrating your 40th anniversary with you. As we celebrate this important milestone, let us draw lessons from the past as we consider opportunities for the future. From $ in gross premiums in 1965, the general insurance industry has grown more than 60 times, writing premiums of $ in 2005. In real terms, the compound average growth rate is a credible 8.2%, just above Singapore's average GDP growth of 8.0% over the same period. GIA’s role and challenges going forward GIA has played an important role in shaping the growth and development of the general insurance industry. The Best Practices on Agency Management, the Premium Payment Framework and the revised Code of Practice are examples of the good work done. Another important role played by GIA is to be the voice for the industry. For example, the Motor Insurance Review Workgroup's initiatives were pivotal in steering the motor insurance sector's return to profitability. GIA has also taken a pro-active stance in educating consumers on general insurance products.

The Risk-Based Capital Framework and Risk-Based Supervisory approach give room for institutions to innovate and take more risks as long as adequate controls and risk management practices are in place. BIS Review 103/2006  1  Liberalisation of the general insurance industry MAS will also continue to encourage greater participation from a wide range of global insurance players in our market. In 2000, we lifted the moratorium on admission of new direct general insurers and removed the 49% limit on foreign shareholding in locally-owned direct insurers. Since then, the industry landscape has evolved considerably. Today, we have a diverse network of 58 direct insurers, many of whom are specialist insurers, 27 professional reinsurers and 60 captives. Most of the top international insurance and reinsurance brokers are also here. We continue to see interest from more players seeking to establish a presence here. We will consider all applicants that are well-capitalised, have an acceptable rating, and are managed by experienced professionals with a good track record even if the company is newly established. Singapore as an insurance hub Singapore has achieved a critical mass of insurance players and activities, becoming an insurance hub. This critical mass means a wide range of insurance products and services are available. Singapore is a logical choice for those seeking to purchase insurance because they know that there are capacity and expertise here. Indeed, Singapore serves as an important regional reinsurance centre as well as the largest captive domicile in Asia. Asia holds many opportunities for insurance.
Also, the independent asset management company managed to limit the losses on the troubled assets they took over from the Swedish banks. Something similar seems to be occurring right now in the UK. The British also applied the good bank-bad bank model in the restructuring of Northern Rock. While the good part of that bank is still in the red, the bad part looks likely to return to making a profit already this year! So even though it is very difficult to assess all the direct and indirect effects of one particular solution in relation to another, those examples at least indicate that you can achieve better outcomes by acting economically savvy. But following the principle of being economically savvy is important not only because recklessly spending taxpayers’ money is irresponsible. It also serves other functions. One is combating moral hazard. Some people see the injection of state money as undue intervention, and look on it as a sign that you are abandoning the mechanism of private markets. Quite frankly, it signifies the opposite. To preserve the discipline in markets, it is important that shareholders and creditors are not allowed to walk away from a failure without suffering economic damage. So, did investors and creditors suffer their fair share of the losses during the recent crisis? Unfortunately, my answer is “no”. In many of the recent banking failures around the world, incumbent shareholders have maintained their ownership stakes or even remained in control of the bank. Creditors have enjoyed explicit or implicit guarantees.

For  BIS Review 36/2010  11  instance, the Committee thought that the chance that inflation would be 2% or higher in 2011Q1 was between 15% and 20%. We can once again use the February forecast to highlight a few of the key messages that the MPC wanted to communicate. In the early part of the forecast period, the probability of inflation being above the target is very high. This is because the data for inflation are well above target at present, and also because the fan chart here is relatively narrow. But the projection for inflation falls over the forecast period. This implies a fall in the probability of inflation being above target. Towards the final part of the projection, the probability of inflation being above the target rises back to being broadly one half. This chart emphasises that, in spite of the most likely outcome for inflation being below target, the nature of the distribution of risks implies that the probability of exceeding the target is about one in two. We can also combine the usual top-down fan chart with the information in the cross-sectional densities to produce a 3D fan chart [Slide 20]. The particular advantage of this chart is that it shows how the overall density changes over time. For instance, when the distribution is very narrow, such as at the start of the forecast period, the probability density at the centre of the fan is higher, simply because the MPC is more confident about its central forecast here.
First: As of January 1, 2005 we dropped six zeros from the Turkish lira. Thiswas an important development for the economy as a whole. Second: The Turkish Statistical Institution announced a change in the calculation methodology of the price indices including CPI, starting from January 2005. During 2005, in addition to these two developments, further steps were taken in order to improve conditions before starting full-fledged inflation targeting regime. We continued to develop our decisionmaking process towards more transparent and efficient policymaking. So, though the Monetary Policy Committee continued to be an advisory body in making policy decisions, it began to meet regularly on the pre-announced days to discuss developments on inflation and economy in 2005. Decisions on short-term interest rates of the Central Bank were made public on the following business day taking the evaluations during the meeting into account. Following the announcement of policy decisions, a report on inflation and outlook, which would include the reasoning of the decision and the views of the Committee members together with the signals on how the decisions on interest rates would evolve in the future, has been made public. Another step was the reorganization of the Research Department to fit the needs of policy design and analysis under the full fledged inflation targeting regime. Besides, the information set that we use to forecast future inflation was further enlarged; forecast models for inflation were improved and sophisticated. Now, let me proceed with some of the key elements of full-fledged inflation targeting regime that became effective in 2006.

We now follow a “fixed rate full allotment” tender procedure and have significantly expanded the maturity of our operations. Banks have been granted access to essentially unlimited liquidity at our policy interest rate at maturities of, initially, up to six months. This is an exceptional mode of operation. In normal times we auction a given amount of central bank credit and let competition between the bidders determine the interest rate. This unusual mode of operation implies that we currently act as a surrogate for the market in terms of both liquidity allocation and price-setting. •  Our second building block is the long list of assets that we take as collateral. This list was already very long before the crisis, but we have extended it even further and now accept an even wider range of securities as collateral. •  The first two building blocks offer unlimited refinancing against a very wide range of collateral. But they can only reach the financial system if they are coupled with the third building block, namely the very large number of counterparties that have always been able to take part in our refinancing operations. Even before the financial crisis, this number was higher than for the other major central banks. Following the changes to our operational framework in October last year, this number rose further. All these non-standard measures have now been supplemented by further exceptional steps that the ECB’s Governing Council decided to take at its last meeting on 7 May.
There were, of course, “cold turkey” alternatives, but they were considered too risky at the time. The Central Bank of Iceland’s effective policy rate peaked at 18% in early 2009 (at the time, the seven-day collateral lending rate) but has now been reduced to around 5½% (now the average of the rates on certificates of deposit and current accounts). The exchange rate stabilised in the second half of 2009 with no supporting intervention since early November 2009. So far this year, the exchange rate has appreciated by 11% in trade-weighted terms, again without any supporting intervention. This has alleviated pressures on impaired private sector balance sheets and contributed to relatively speedy disinflation. Fiscal policy was set within a medium-term fiscal consolidation programme covering the period 2009–2013. The programme aims at a primary surplus in 2011 and a substantial overall surplus in 2013, making it possible to reduce Treasury debt from that year onwards. The announcement of a medium-term plan made it possible for automatic fiscal stabilisers to work more or less unhindered in 2009, with fiscal consolidation taking hold in 2010. This was important in two respects. First, it limited the negative demand effects of fiscal consolidation precisely when the recession was at its steepest. Second, it sent a signal that adverse public sector debt dynamics would be addressed over the medium term, thus reducing risk premia in domestic and foreign interest rates facing the sovereign.

In both dimensions, I believe this kind of long-term approach is the hallmark of a high-quality financial system. Concluding remarks 27. I hope these reflections have shed some light on Hong Kong’s distinctive qualities as an international financial centre. It is resilient – our institutions and markets remain safe and sound in good times and bad. And it offers huge opportunities to local and global participants, driven by the Mainland’s continued financial liberalisation, as well as developments in fintech and green finance. 28. My team and I are committed to upholding these qualities. We will continue to reinforce Hong Kong’s position as an international financial centre of the highest quality. This journey has no end – and we will rely as always on strong support from everyone that we work with, including many of you. I am confident that, by working together, we can continue to build on Hong Kong’s unique foundation – and enhance our position as one of the world’s pre3/4  BIS central bankers' speeches  eminent financial centres. 29. It only remains for me to thank the Hong Kong Management Association for having me here tonight; to thank you all for your attention; and to congratulate the winners of the Quality Award – your achievements are rightly honoured today. 4/4  BIS central bankers' speeches
The operational target of monetary policy as defined by the Government is inflation of close to 2.5 per cent over time. The inflation target provides an anchor for economic agents’ choices concerning saving, investment, budgets and wages. Households, businesses, public entities, employees and employers can base decisions on the assumption that inflation in Norway will be 2.5 per cent over time. High oil prices have a different impact in Norway than in oil-importing countries. When oil prices increase, the value of Norway’s national wealth rises. The idea behind the Petroleum Fund is that the cash flow from an increase in oil prices should accrue to the Fund and be invested abroad and should not be included directly in the government budget. As a result, the increase in the cash flow will not affect the domestic economy. Likewise, a fall in oil prices will not have an immediate impact on the domestic economy, but result in a lower accumulation of foreign assets. Even though the Petroleum Fund and the fiscal rule shield the Norwegian economy to a certain extent from fluctuations in the oil market, the Norwegian economy will still be affected by developments in oil prices. If changes in oil prices influence growth in the global economy, this will in turn impact Norwegian exports of traditional goods and services. Petroleum investment on the Norwegian continental shelf is another important channel. Fluctuating oil prices contribute to substantial variations in petroleum investment. This has spillover effects on the mainland economy.

As a personal reflection I can say that explaining the importance of low inflation is much easier - not least for a central bank governor - than the task of selling the advantages of a stable currency. This is particularly true as the latter task becomes increasingly pressing if the economy has been hit by problems with costs and is facing speculative attacks. Some of you may remember that for a few days in the autumn of 1992 the instrumental rate in Sweden was raised to as much as 500 per cent. In my view, this is probably one important explanation why Sweden is not a member of the ERM system - at least not at this stage. The challenge during the 1990s for the inflation targeting countries has been to build a rigorous framework around the new regime. Answers have been needed in particular to questions like the following: What rate of inflation should be targeted, what index should be used, are bands around the target necessary, the degree of transparency, etc. It has also been important to formulate a monetary policy reaction function, that is, to define the balance between inflation variability and output variability. The reason why central banks do not aim for maximum short-term stability in either inflation or output is that attaining only one of the targets would be costly.