samchain/econo-pairs-v1 huggingface dataset:
Nonetheless, many observers believed that this framework, although messy and complex, worked reasonably well. It is harder to make that case today. The financial system plays a vital role in long-term economic growth by helping to efficiently allocate the resources of savers to those individuals and firms with ideas and the capacity to put those ideas into action. And the financial system plays a critical role in economic stability by affecting the capacity of the real economy to withstand shocks and the ability of macroeconomic policy to mitigate the impact of those shocks. The challenge is in achieving the right balance between efficiency and resilience, between innovation and stability. Our financial system has many strengths, and we need to examine ways to build on those while making the system more resilient to future shocks. Achieving this balance will involve a very complicated set of policy choices. Until we get through this crisis, it will be hard to make definitive judgments about the appropriate scope and nature of the changes that will be necessary. Any reform must offer the prospect of a substantial improvement in outcomes relative to potential costs. And those trade-offs will have to be evaluated against, among other things, the potential distortions created by differential treatment across regulated and unregulated entities, the magnitude of the tax imposed on the overall level of financial intermediation, and the extent of the safety net and the potential for moral hazard.

At international level, there should be an efficient cooperative framework adapted to the diversity of risks and challenges raised by stablecoins. The second action is to foster the major private project to create a unified, innovative and autonomous European solution, the European Payments Initiative (EPI). The Eurosystem has supported it right from the start. Concretely, EPI will provide citizens with an innovative and competitive European payment solution, as an alternative to the dominant and extra-European players already established in Europe or the Bigtechs in the future. EPI will be a company based within the EU, controlled by European authorities: we will thus have greater control over its risks, its economic model for meeting European consumers’ needs, and how it uses its data. Let me pay tribute to those who are driving the EPI project, and encourage them to implement it as quickly as possible. We need to speed up Autumn 2021’s “go/no go” decision stage and the governing bodies also have to be put in place as soon as possible to help EPI deploy on a pan-European scale. Public authorities are and will remain completely committed in their support: the European Commission, in order to validate the economic model; ministers in the different countries – starting with France and Germany. We as Eurosystem are committed to providing the underlying settlement infrastructures, including TIPS, which is a powerful European asset. And EPI will be most welcome to participate in the front-end prototype of CBDC.
Øystein Olsen: The conduct of monetary policy Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 19 May 2016. *  *  *  Please note that the text below may differ from the actual presentation. Thank you for the opportunity to report on the conduct of monetary policy. My introduction here today is based on Norges Bank’s Annual Report for 2015 and our monetary policy assessments up to the monetary policy meeting last week. Chart: Inflation Monetary policy in Norway has since 2001 been oriented towards keeping inflation low and stable. The operational target is consumer price inflation of close to 2.5 percent over time. Over the past 15 years, inflation has averaged around 2 percent. This is close to the target. Norges Bank operates a flexible inflation targeting regime, giving weight in our interest rate setting to developments in output and employment as well as inflation. The effects of monetary policy are uncertain. This normally suggests proceeding with caution. As monetary policy also seeks to be robust and take account of the risk of particularly adverse outcomes for the economy, the tasks of monetary policy should include contributing towards mitigating the risk of a build-up of financial imbalances.

In the wake of the sharp fall in oil prices since summer 2014, the key policy rate has been lowered several times. Monetary policy is facilitating restructuring by supporting a weaker krone and thereby speeding up the adjustment to a lower cost level. In addition, lower interest expenses are easing the burden for many households and enterprises. There is still room for manoeuvre in monetary policy. However, in an economy undergoing restructuring, monetary policy cannot fully counteract the effects on output and employment. Internationally, monetary policy has faced substantial challenges in recent years. Inflation and interest rates are both close to zero in many countries. The instruments used have rarely been used before. The effect of this policy is uncertain and the expected increase in policy rates has been repeatedly pushed further into the future. Central banks are in uncharted territory. The experiences of other countries indicate that the lower bound for policy rates is below zero, although precisely how far below is difficult to estimate. Lower interest rates may increase financial system vulnerabilities. Low interest rates also increase the risk of a surge in credit growth and property prices. When the key policy rate approaches a lower bound, the uncertainty surrounding the effects of monetary policy increases. This suggests proceeding with greater caution in interest rate setting. However, should the Norwegian economy be exposed to new major shocks, the possibility cannot be excluded that the key policy rate in Norway may also turn negative.
One of the more pronounced differences with earlier periods is that Sweden has broken the pattern of high inflation, recurrent cost crises and devaluations that characterised the 1970s and 1980s. Surveys and other information indicate that for some time now, households and firms have adapted their inflation expectations to the Riksbank’s target. In that it influences the behaviour of those who set prices and wages, this in itself assists our endeavours to keep inflation down. Estimates by the Riksbank suggest, moreover, that the long-term component of inflation decreased appreciably in the 1990s, in which case there is a more permanent restraining force that is not directly dependent on how the real economy is functioning. But as I mentioned earlier, there are good grounds for supposing that a low, stable path for inflation can generate positive indirect effects on the real economy. There are also certain signs that the cyclical fluctuations in inflation - and not just its average level - have been smoothed in recent years. 5  BIS Review 18/2000  Thus, there are some indications that the present cyclical upswing will not generate the same acceleration of inflation as its predecessors. But as output in the Swedish economy has been below the sustainable trend ever since the beginning of the 1990s - so that what we have experienced, strictly speaking, is a long period of low activity - it is difficult to tell whether the behaviour of inflation over a complete cycle has in fact changed.

In this respect, I would like to thank the organization committee for their efforts in bringing these very interesting and enlightening studies under this conference. I wish the conference a complete success and I would like to thank all our guests for their participation. 2  BIS central bankers’ speeches
To a certain extent, these high growth figures were of course a natural consequence of the major fall in GDP in late 2008 and early 2009. But, in contrast to many other countries, GDP in Sweden also began to exceed its pre-crisis level relatively quickly (see Figure 1). BIS central bankers’ speeches  1  Figure 1. GDP in Sweden and abroad Index, Q4 2007=100 106  106 UK Euro area  104  104  USA Sweden  102  102  100  100  98  98  96  96  94  94  92  92 07  08  09  10  11  12  13  Note. Seasonally-adjusted data Sources: Statistics Sweden and national sources. However, despite the relatively favourable development of GDP, it seems that unemployment has become entrenched at a high level. Initially unemployment increased less than we expected given the substantial fall in GDP – it peaked at 9 per cent in early 2010 – but since then it has fallen no lower than 7.6 per cent (see Figure 2). In my view, this is a level that is much higher than what can be considered a long-run sustainable unemployment rate.1 Figure 2. Unemployment in Sweden Per cent of labour force 9  9 Average 1999-2012 Unemployment  8  8  7  7  6  6  5  5 05  06  07  08  09  10  11  12  13  Note.

Convergence Programs of the new Member States should include ambitious Medium Term Objectives to ensure that not only the Maastricht criteria are met, but most importantly, the emergence of excessive deficit situations is avoided and the risks of taking recourse to exchange rate adjustments after joining the ERM2 (and, eventually, the euro area) are minimized. The well functioning single market for all goods and services, including infrastructure networks, as well as pursuing the National Reform Programmes in the context of the reinforced Lisbon agenda is the other pillar for the success of the euro area and for the new Member States in particular. Estonia has been a de facto member of the euro area since the inception of its independent currency in 1992. Fixing the local currency to D-mark, and later to the euro meant that the monetary policy decisions were not made in Estonia. Estonia's currency board regime implies prudent fiscal stance that has been largely adhered to since 1992, resulting in our general government having accumulated a relatively large net asset position of around 10 percent of GDP. A solid budgetary position and early deregulation of product and capital markets implies that Estonia has been well placed to absorb both positive and negative shocks during the last 15 years. Deregulation and reform in preparation of the EU membership has allowed us to fully integrate our economic and financial systems with the Single Market. However, that kind of approach requires, in today's conjuncture, forward-looking structural reforms in almost all EU member states, e.g.
Importance of sound advice Access to sound financial advice has become even more important today as households face the challenges of managing heavier debt loads, higher costs of healthcare and education, effects of natural calamities that are occurring with greater frequency, and longer life spans. We believe that the responsibility to provide sound advice falls on all insurance intermediaries, whether you are an agent, an insurance broker, a bancassurer, or a financial adviser. This is clear in our Guidelines on Proper Advice which states among other things, that if an intermediary cannot match the needs and requirements of a customer with a life or takaful product within the intermediary’s offerings, the intermediary should not recommend any product to the consumer. However, we are also mindful that sound advice can have different shades which depend on many factors, including the competence of those providing the advice, the solutions that they are permitted or equipped to advise on, and incentive effects which may, either in perception or reality, colour that advice. Financial advisers provide an alternative channel through which consumers can obtain insurance advice, taking into account individual perspectives on these factors. The fundamental principle remains the same – that whichever the channel, and acknowledging the advantages and limitations of different channels, consumers should receive advice that is in their best interests.

Jessica Chew Cheng Lian: Financial advisers the future – rise of the new wave Keynote address by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia, at the 2nd Annual Conference of the Association of Financial Advisers “Financial advisers the future – rise of the new wave”, Kuala Lumpur, 31 October 2013. *  *  *  It is my great pleasure to be here this morning at the 2nd annual conference of the Association of Financial Advisers (AFA). This year would be the eighth year that financial advisers have been a part of the financial landscape in Malaysia. As the industry looks to the future, I think it is useful to also look back to the motivations for developing financial advisers in Malaysia. Fundamentally, the objective was to improve the quality of advice on insurance solutions that was being provided to consumers. Before financial advisers, such advice was mainly only available in this country from tied agents and this system had certain limitations in terms of incentive structures and the breadth of products that the agent could draw on to advise consumers. A second objective, and perhaps one that has not been emphasized enough, is the expectation that financial advisers would be able to help individuals and households with a broader financial outlook. This means helping individuals and households understand how insurance fits within their broader financial management strategies to grow their savings, manage risk and meet specific financial goals.
The first two ingredients provide efficiency in monetary policy, in the sense that private agents knowing the central bank’s assessments and reaction function can respond appropriately to economic developments. The third ingredient contributes to a better understanding of the objectives of monetary policy and the link between objectives and policy. This could underpin the credibility of the reaction pattern, and is also important for democratic accountability. In addition, the reaction function could change over time, for example due to a change in how the economy works or an improvement of the understanding of economic mechanisms. The criteria could then give some guidance to the public on how and why the reaction function might change. Let me briefly explain how Norges Bank communicates the three ingredients of our communication, and let me start with the forecasts. Chart 1 shows the forecasts of the key variables. The uncertainty bands are based on model simulations and reflect estimated variances of the different shocks. (Note that there is also a fan chart for historical values of the output gap, since there is also uncertainty about potential output in retrospect.) Communicating uncertainty through fan charts in the inflation reports was introduced by the Bank of England in 1997. While the fan charts for inflation illustrate that inflation cannot be controlled perfectly by the central bank, this argument does not apply for the policy interest rate.

This time round, the strong credit market from 2003 to 2005 have lulled investors into placing big bets in high-yielding structured credit instruments, on the assumption that such favourable credit conditions will continue unabated. The second point is on proper risk assessment. Back in 1997, lenders were providing funds without executing necessary scrutiny or appropriately balancing the risks against returns. Likewise, the recent credit turmoil has highlighted the importance of assessing risks. The  BIS Review 11/2008  1  distribution of risk through leveraged structured vehicles or conduits, and complexities in the structures have made it extremely difficult for investors to disaggregate the risks in times of stress and volatility. As a result, over-reliance has been placed on financial models and ratings without full comprehension of the risks of the product and misunderstanding the scope of the ratings that measures default risk. Third, excessive leverage in both crises has exacerbated the problems triggered by the mounting default rates. Excess liquidity led to massive domestic lending; at the same time, investors geared up aggressively and bet on continually rising asset prices as collateral. When the crisis broke, the use of leverage accentuated the losses, which led to widespread risk aversion and uncertain market sentiments. The loss of confidence along with the repricing of credit risk have intensified the volatility in the financial markets; and this contagion spread rapidly beyond the structured credit space and across markets. So what does all this mean for Asia?
The FPC made clear last year that to deliver that regulatory outcome “regulatory safeguards will be needed for a non-bank systemic stablecoin to ensure that the coin issuance is fully backed with high quality and liquid assets, alongside loss absorbing capital as necessary, to compensate coinholders in the event that the stablecoin fails”[9]. It also made clear that in the absence of deposit protection for coinholders, other elements of the regime would need to be strengthened to deliver the necessary level of assurance. The consultation will set out in more detail how the coinholders’ claims on the stablecoin issuer and wallets should be structured to deliver redemption at par in line with commercial bank money, how the backing assets should need to be managed to ensure they are always available to meet redemptions and, more generally the requirements for corporate structure, governance, accountability and transparency necessary to meet the standards we expect in other parts of the financial system that carry out the same functions. The FTX example underlines how important these aspects are. The legislation covers the use of crypto technologies for the payments function. The Treasury intends to consult in the near future on extending the investor protection, market integrity and other regulatory frameworks that cover the promotion and trading of financial products to activities and entities involving crypto assets. At present, in the UK, it is, to a large extent, only the anti-monetary laundering regulatory framework which applies to these activities and entities.

The broader concept of the “home market” should be developed further. One of the challenges will be to ensure strong competition in retail markets so that the benefits of integration could be felt by consumers across the region. Fostering sustainable growth in the region requires us to take a systemic view when designing harmonized regulation for the financial sector, and this is where the quality and proactivity of macro-prudential supervision becomes so important. The Nordic-Baltic dimension adds two nuances to the design of macro-prudential policies. First, our own experience of the past decade was a stark reminder of the particular challenges of managing capital flows in highly integrated economies and financial sectors. Second, most of the large Nordic banking groups have been considered as too big to fail in almost all countries in the region. BIS central bankers’ speeches  1  Diversity in the financial sector structures is a challenge for cross-border cooperation As I said earlier, the economies and financial sectors of the Nordic-Baltic region are diverse as well as closely integrated. Different countries in the region have opted for different policy frameworks; the structure of the financial sector also differs by country. It turns out that in a region of only eight countries, some of which are very small, one needs to tackle very much the same array of problems that make the coordination of financial sector policy and supervision so challenging in Europe. There are home and host countries; there are non-EU member states, EU member states, and euro area member states.
Finding solutions to this problem is not going to be easy. But this is where efforts to revive the domestic economy will need to focus on. New lending is perceived as risky given the current negative factors on the macro fronts and external factors, while NPL overhang preoccupied bankers’ attention and kept them from renewing their client relationship. To address this problem, the authorities have chosen to approach the problem in three ways:  BIS Review 70/2001  3  ·  First, to further accelerate corporate debt restructuring by improving the legal frameworks and by setting up a national asset management corporation to deal with the remaining unresolved problem loans. Progress on this front is most visible. The law establishing the Thai Asset Management Corporation, or TAMC, was passed and operations set to begin soon with all asset transfer to be completed by September. A key benefit of TAMC is the advantage of being a single creditor of the transferred asset. This would allow TAMC to deal effectively and speedily with the unresolved debts that involve multiple creditors. Also, the vast executive powers given to TAMC by law would make it easier for TAMC to take a comprehensive approach to debt restructuring, and have the ability to deal with cases that might warrant corporate restructuring and change of management. ·  Second, to introduce a scheme of credit guarantees which would provide a facility of risksharing between corporate borrowers, the Government, and banks based on market mechanism.

To restore stability to the financial system, the most immediate step taken was to ensure that financial institutions have adequate capital to withstand future risks. The sources of capital were to come from the private sector including the original shareholders and new partners, both Thai and foreign. As it turns out, in some cases, the authorities did eventually provide a recapitalisation scheme. Nevertheless, this scheme was not much utilized by banks. In fact, only 74 billion baht of the scheme was actually used. Another important step taken to stabilize the financial system was to raise the prudential and supervision standards such as the rules on loan classification, provisioning, asset valuation, just to name a few examples, to be in line with international standards. As a result, commercial banks in Thailand have gradually recovered from the crisis. Here are some facts and numbers. ·  The banking sector now has a capital adequacy ratio of 11.9%. ·  The Thai banks recorded a better result in the first quarter of this year. They turned in a profit of 1.9 billion compared to a loss of 39 billion baht in the same period last year, as loan provision expenses declined significantly. This is partly due to the large provisioning and loss recognition, which were already taken last year. In addition, there has been substantial progress in debt restructuring the Thai banks recorded.