samchain/econo-pairs-v1 huggingface dataset:
In contrast to developments in M3, the growth rate of the narrow monetary aggregate M1 has – after a trough in the third quarter of 2008 – started to rise again, and reached 5.3% in the first quarter of 2009. While M1 developments usually prove inferior to M3 developments in terms of their information content about future inflation, in the case of the euro area they have traditionally exhibited good leading indicator properties for future real GDP growth. Taken per se, such a development would also speak against a deflationary scenario and might offer valuable insights into the timing of the recovery. To conclude, monetary indicators provide important information to try understanding the likelihood of different scenarios ahead. In this respect, the real-time problem which is always prevalent in monetary analysis – but also in other types of analysis – becomes more serious in a financial crisis. 4. Short and long term policy responses to the crisis  There are inevitable challenges associated with policy actions in times of crisis. Central banks around the world have embarked on untested areas of monetary policy-making. Expansionary fiscal policies and government interventions to stabilise the financial sector are expected to dramatically increase public debt. This could pose a severe threat to the sustainability of public finances and eventually to macroeconomic stability. To preserve macroeconomic stability over the medium term, there is a need for careful monitoring of the policy stimulus over the policy-relevant horizon, combined with well-designed exit strategies from non-standard policy-making.

If the trilemma is in fact a dilemma, then countries will have to choose between monetary independence and closing their capital accounts. 2/4  BIS central bankers' speeches  I would question the generality or starkness of this dilemma. For example, I do think that the euro area can determine its own course. Our asset purchase programme has contributed to a spread exceeding 250 basis points between the 10 year yields in the US and in Germany. Likewise, the gap between policy rates in the US and the euro-area is the widest since 2009. More technically, an estimated Taylor rule for the euro area that includes US monetary policy as one of the explanatory factors finds only a very modest co-movement between the two. What is more, countries seem to be arranged along a continuum, with some exhibiting total independence at one end to those with exchange rates pegged to the US dollar at the other. So they don’t have to choose one of the two polar positions but can pick an intermediate position. For example, putting some temporary restrictions on cross-border movement of capital could give some but not complete independence of monetary policy. But is there more that central bankers can do to manage the tensions created by this economic divergence? Put another way, how do we reconcile yet another paradoxical couple: independence and co-operation? In my view, we can and should act to enhance co-operation between central banks, based on four building blocks: Mutual predictability of policy making.
It is always misleading to draw conclusions from individual observations, as temporary factors can have a major effect. However, price increases may also be due to the fact that the utilisation of resources or propensity for inflation have been slightly higher than we had assessed earlier. There is every reason to increase vigilance in this respect. The rapid price rises in parts of the services sector give particular cause for concern. There is every reason to increase vigilance over the next few months with regard to price signals from the market. What significance does the krona have? I thought that in this context I would spend a little more time on the development of the Swedish krona. When the krona is undervalued, as it is today, this tends to stimulate exports, which raises total demand and increases inflationary pressure. At the same time, import prices become higher in Swedish krona. The development of the krona thus affects inflation in various ways and is therefore of interest to the Riksbank and to monetary policy in the same way as other factors that affect inflation. On the other hand, the Riksbank has no target for the krona exchange rate, as was the case prior to 1992, when monetary policy was aimed at a fixed exchange rate rather than price stability. However, I think, as do many others, that the krona is currently very undervalued.

There could also be reason at some point to indicate that the market's pricing has moved significantly out of the region considered reasonable. For instance, this was the case, as I understand it, when the ECB intervened last autumn. In these cases the central bank can take action to "nudge" or reinforce a trend in the market without actually establishing any ceiling or floor. In my opinion, however, one should be restrictive in the use of such interventions. If the trend should turn and move in the opposite direction, the intervention might do more harm than good. Is it good for Sweden if our currency is undervalued over a long period of time? All experience indicates that this is not so. Although an undervalued currency gives the export industry and importcompeting industry a competitive advantage, which may sound positive in the short term, it reduces competition pressure and in the longer perspective it delays the structural transformation necessary when the exchange rate eventually returns to a balanced level. At the same time, the import industry has an uphill struggle, which leads to companies being wiped out in this sector that would have not have collapsed with a correctly valued currency. In addition, major fluctuations in themselves have a subduing effect on developments as the risks increase on all international transactions. This can be counteracted to some extent through hedging, but hedging also has a price that rises as uncertainty increases.
A cryptoasset is not money (hence the term cryptocurrency is misleading) and has no intrinsic value because it has no backing. It can have extrinsic value, in the sense that people like to collect and own them, just as they like to collect and own all sorts of things, but that extrinsic value is highly unstable and could be nothing. I have met crypto enthusiasts who take the libertarian view that something backed by nothing has more confidence in value than something backed by the state. Suffice to say, that is not a view I agree with. With stablecoins, there will be backing assets, and therefore they could have intrinsic value. An immediate public interest question therefore is what will it take for them to be trusted as money, bearing in mind that while they will primarily serve the purpose of a means of exchange, any holding of them will also be a store of value, even if this is an incidental objective? Stablecoins have the potential to be systemic in terms of their importance for the financial system and its stability. As our paper describes, the precise definitions and mean of ‘systemic’ in this context needs further work, but it will be linked to their ability to scale up and grow rapidly, and to become widely used as a trusted form of sterling-denominated payments by households and non-financial businesses.

The regulatory model for stablecoins could include different applications of these features – as long as it offers equivalent protections to those for commercial bank money. As part of this, a key requirement will be to ensure that, unless the stablecoin is operating as a bank, the backing assets for stablecoins cover the outstanding coin issuance at all times. An alternative to a private stablecoin, but not a mutually exclusive one would be central bank digital money in the form of a central bank digital coin (CBDC). Central bank money has a unique role in anchoring value and promoting confidence in monetary systems. A CBDC could therefore play an important role in sustaining, and potentially expanding retail access to central bank money. I have discussed the public interest in the safety and security of money. But there is another very important public interest in this area which goes to the heart of the monetary and financial system. I mentioned earlier that commercial bank money combines in one place – bank accounts – the store of value and means of payment functions of money and in doing so enables lending to the real economy. What if new forms of digital money – Stablecoins or CBDC – result in a large scale displacement of commercial bank money which means that a higher fraction of money in the economy must be backed by high-quality liquid assets rather than by loans to the real economy, with this being necessary to preserve the stability of a now more fragmented financial system.
The  tightening  of monetary policy in response to improved economic conditions may impact the growth of major advanced economies. The US Federal Reserve and the Bank of England have progressively raised interest rates; meanwhile, the European Central Bank has started phasing out its bond-buying programme (QE). The impact of monetary policy normalisation on financial markets should be closely monitored. The overall market sentiment is optimistic, but signs of possible repricing in financial markets are emerging. Market volatility has increased since the beginning of the year and price corrections were observed, most significantly in equity markets. Valuations remain stretched in equity, bond and certain real estate markets creating a high risk of asset repricing. Recent tensions in emerging markets, especially Turkey and Argentina, initiated some flight to safety mainly towards US investments. In the near future, the threat to global trade created by protectionist tensions, and growing political uncertainties, also in Europe following the developments in Italy and a significant probability of a hard Brexit may weigh negatively on the global environment. In addition, the European insurance sector has been facing an unprecedented and challenging low interest rate environment for the past four years. The downward trend in bond yields had a direct impact on the return on investments, especially for life insurers 2  who hold a substantial portion of their investments in bond securities.

Regarding the International Capital Standard, which aims to develop an international capital standard in order to be able to establish a comparable basis in terms of prudential requirements for all international groups, recent progress was made in Kuala Lumpur in November 2017 which should lead to, by the end of 2019, a version called “ICS 2.0” that will be used as a reference in international supervision Colleges, for a transitory period of five years. During this timeframe, each internationally active insurance group will have to ensure a compulsory and confidential five-year monitoring period based on the ICS, after which this standard is expected to become effective. Now, I will turn to IFRS17: it would be unreasonable to apply the new IFRS17 accounting framework right now. Given the obvious issue of timing, it is quite welcome that the IASB reopened the discussion and that the application of this standard has now been postponed by one year. This will primarily give us time to reach an agreement on identifying groups of loss-making contracts. We also want to bring the discussion on the 4  treatment of reinsurance contracts held to a satisfactory conclusion. At this point, there is too much room for interpretation in the standard, which could interfere with the comparability and consistent application across countries. In Europe, the current “hot topic” is the forthcoming Solvency 2 review. This review must include a full and objective assessment of the framework that has now been in place for three years.
For instance, Charles Engel from the University of Wisconsin compared price differences for the same goods in cities on both sides of the Canadian and US border with price differences between different cities in the US. Although US and Canadian cities have largely the same language and culture, as well as free trade, the different currencies cause prices to vary as much on each side of the border as between cities at opposite ends of the US. Finally, of course, there is the increasingly important role of the euro as a dominant international currency. The most immediate gain from this is an increase in seignorage income to the extent that the euro is more widely held outside the euro area than the sum of the currencies that preceded it. Taken as a whole, the euro area is the world’s largest exporter and importer, accounting for about one-fifth of international trade. Despite this the US dollar is still the most common counterparty in foreign exchange trading and the widespread use of the dollar as a ‘vehicle currency’ in itself reinforces its status. Given that the euro is still a young currency it is likely to grow in importance and may in time have the potential to catch up with the dollar’s share in the foreign exchange markets.

  Total merchandise export earnings rose by 71.2 percent to $ million in 2010 from $ million recorded in 2009, following increases in both metal and non-traditional export earnings.   Metal export earnings rose by 81.6 percent to $ million in 2010 from $ million in 2009, of which copper export earnings were US $ million and cobalt export earnings were US $ million. This was explained by the rise in copper and cobalt production following increased capacity utilisation at various mines and higher global market prices.   Exports of non-traditional products registered a growth of 34.3 percent to $ million in 2010 from $ million the previous year. This was driven by higher exports of copper wire, cane sugar, burley tobacco, cotton lint, electrical cables, gemstones, maize and maize seed, and wheat and meslin.   Total merchandise imports grew by 40.3 to $ million in 2010 from US $ million in 2009. Exchange rate   Following strong macroeconomic fundamentals and increased supply in foreign exchange, the Kwacha performed favourably against all the major traded currencies in 2010, except for the South African Rand. The Kwacha appreciated by 4.7 percent against US dollar to trade at $ from $ in 2009.   Similarly, the Kwacha appreciated by 6.0 percent against the British Pound and by 8.0 percent against the Euro to trade at £ and € respectively. 2  BIS central bankers’ speeches  However, the Kwacha registered a depreciation of 8.8 percent against the South African Rand.
Már Guðmundsson: Managing capital flows in a financially integrated area – lessons from the Icelandic financial crisis Remarks by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at a conference organised by the International Monetary Fund, Bank of Estonia and Sveriges Riksbank on Nordic-Baltic financial linkages and challenges, Tallinn, 13 December 2013. *  *  *  Accompanying charts can be found at the end of the speech. I would like to thank Eesti Bank, Sveriges Riksbank, and the IMF for inviting me to speak at this most interesting event. In my remarks, I will focus on those aspects of the Icelandic financial crisis that are most closely associated with the topic of this session, which is financial integration. I will draw out some salient features of that story and then link them to several lessons that might be of more general relevance. In the autumn of 2008, two separate but interrelated sub-stories of the recent Icelandic financial and economic saga converged in a tragic grand finale. These are: 1. Iceland’s boom-bust cycle and problems with macroeconomic management in small, open, and financially integrated economies. This is a story that has played out many times around the globe, and many of its elements have been seen before in Iceland. 2. The rise and fall of three cross-border banks operating on the basis of EU legislation (the European “passport”).

Turning to the monetary analysis, broad money (M3) continues to expand at a robust pace, with an annual rate of growth of 4.7% in February 2017, after 4.8% in January. As in previous months, annual growth in M3 was mainly supported by its most liquid components, with the narrow monetary aggregate M1 expanding at an annual rate of 8.4% in February 2017, unchanged from the previous month. The recovery in loan growth to the private sector observed since the beginning of 2014 is proceeding. The annual growth rate of loans to non-financial corporations declined to 2.0% in February 2017, from 2.3% in the previous month, while the annual growth rate of loans to households remained broadly stable at 2.3% in February. At the same time, the euro area bank lending survey for the first quarter of 2017 indicates that net loan demand has increased and bank lending conditions have further eased across all loan categories. The pass-through of the monetary policy measures put in place since June 2014 continues to significantly support borrowing conditions for firms and households and credit flows across the euro area. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need for a continued very substantial degree of monetary accommodation to secure a sustained return of inflation rates towards levels that are below, but close to, 2% without undue delay.
Whatever its starting position the subsequent declines in prices were far more than the domestic industry could bear. Since the mid-1970s domestic output has shrunk by two thirds, domestic employment by 90%. If ever there was a loser from globalisation the UK’s clothing and textile industry would surely qualify as one. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Chart 5: Even in nominal terms clothes are  Chart 6: Globalisation crushed domestic  cheaper than in the 1970s  production of clothing and textiles  price index, 1975=100 800 Rest of consumption 600  Clothes  400  200  0 1975  1985  1995  2005  2015 Source: ONS  Source: ONS  What can we say about the balance of these effects? The red line in Chart 7 plots the estimated gains to consumers from lower prices over this period, relative to an assumed “non-globalisation” path of 1¼% per year. As I said above, the actual and more pronounced declines have delivered a real income gain for consumers of around 3%. The blue line plots the estimated loss in labour income in the sector. Because we’ve assumed real prices would continue to fall somewhat, even in the absence of globalisation, the industry would probably have to have slimmed down a bit (falling prices have to be matched by falling average costs). In a plausible scenario, consistent with the assumed 1¼%-per-annum rate of (real) deflation, job numbers would have 3  fallen by around a quarter .

PPKM together with the Asian Institute of Chartered Bankers will cooperate in the future to develop a series of high quality, advanced level financial market forums and seminars, thus creating a platform to expand network, develop expertise and to advance the Malaysian financial market community to another level of professional and technical excellence. Fourth, technology has become a crucial enabler in the financial industry as it continues to provide benefits by reducing financial transaction cost and enhancing trade execution efficiency. We need to embrace new technology, such as electronic platform. Technology also greatly facilitates market surveillance and transparency by offering real-time information. This is particularly critical in a fast moving market, where delay in information mean loss of opportunities for banks, and delay in taking action to stabilise market. The need for real-time information in a fast moving market is urgent. For instance, trades that are still being concluded through traditional voice broking and conversational dealing screens are already obsolete in developed markets. Technological advancement requires behavioral change As we move forward, financial market participants who rely on the traditional ways for dealing and communicating, they must relook at how they strategize their business to remain relevant in this era of rapid technological innovation. If we fail to change, the consequence is obvious, loss of business and demise of your business. BIS central bankers’ speeches  3  Fifth is the trend towards further regional integration. With the implementation on ASEAN Banking Integration Framework, regional markets will be more integrated.
There are legal arguments about the merit of such claims that I will not comment on here. The fact of the matter is, however, that the Icelandic Government made three good faith attempts to close the issue through negotiated settlements but got caught up in political dynamics and the case might be on its way to the EFTA Court. But the financial risks for the parties involved are dwindling, as it now appears that the estimated recovery from the estate of Landsbanki will cover almost 100% of all deposits in the foreign branches. And of course, the priority given to deposits in the Emergency Act is of vital importance to that result. Let us now turn to some of the lessons learnt from the crisis. First, as regards the EU/EEA framework, the bottom line is that we cannot have a level playing field in banking, except perhaps in risk-adjusted terms, as long as the EU passport is not matched by EU supervision and an EU-wide safety net, which is the logical solution. Furthermore, EU-active banks from small countries with their own currencies should have reduced passport rights and/or face higher capital charges, as they have a less credible LOLR and are therefore more risky, other things being equal. Subjecting all banks in the EU to supervision by an EU supervisor is probably too much, and in practical terms, it might make sense to have two types of bank licences.

This saved the Government significant expense in recapitalising the banks. The new banking system amounted to 1.7 times GDP. As a result, the domestic payment system functioned more or less seamlessly throughout, and customers had continuous access to their deposits. The run on the domestic banks stopped, but at its peak, demand for cash tripled and the Central Bank almost ran out of banknotes. Nonetheless, international payment flows were seriously affected by the freezing order imposed by the UK, and the British authorities’ suspicion that Iceland would not honour deposit insurance in UK branches of the failed Landsbanki and by general distrust among foreign counterparties. With heavy Central Bank involvement, international payment flows were gradually restored in the months that followed. I have expanded at some length on the measures taken when the banks failed, as there are still a number of misconceptions about the process. Some have claimed that the banks were  BIS central bankers’ speeches  3  nationalised. They were not. The old banks are private companies. They are in winding-up proceedings governed by law; they are not under the control of the Government. The Government has a majority stake in only one of the new banks. Others have claimed that Iceland defaulted and got away with it. The opposite is true. The credit of the sovereign was preserved, and all debt obligations have been paid on time. This is why the sovereign was able to tap international capital markets last summer, and why its CDS spread is currently around 300 points.