samchain/econo-pairs-v1 huggingface dataset:
Mr Yam’s statement on the listing of Exchange Fund Notes on the Hong Kong Stock Exchange Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr Joseph Yam, JP, at the listing of Exchange Fund Notes on the Hong Kong Stock Exchange on 19 July 1999. Mr Lee, Mr Chan, Distinguished Guests, Ladies and Gentlemen, Today’s signing ceremony paves the way for the listing of Exchange Fund Notes on the Hong Kong Stock Exchange next month. In addition to offering retail investors an attractive and reliable investment opportunity, this listing will mark an important milestone in the development of Hong Kong’s debt market. Hong Kong, and indeed Asia as a whole, lacks an active debt market. What should in theory serve as an important pipeline of financial intermediation, through which the savings of the community flow into productive investment, has, in this region, always been constricted. At times, it has been quite clogged up. By the standards of developed market economies, our reliance on the banking and equity markets, the two other channels of financial intermediation, has been, and still is, disproportionately heavy. As a result, we cannot really say that financial intermediation in Hong Kong is entirely efficient. One consequence is that, in the event of a failure in one of those channels of systemic proportions, the pressure built up in the other channels could become unbearably great, and even explosive.

A further consequence is disruption to the flow of money from savings to investment and disruption to the economic activities that are so important to the well being of our community. By contrast, we saw in the case of LTCM how, in well developed financial markets, financial flows can be effectively redirected to the banking and equity sectors in response to the failure of the debt market. Indeed, the banks themselves were called upon to rescue LTCM and ensure that, even with dislocation in the debt market caused by excessive leveraging, the financial system could continue to function. No matter whether we are responsible for the plumbing of the financial system or for making money work for the community, we in the financial community all have an interest in ensuring that money flows through these three channels freely, safely and efficiently. One important task for all of us has always been to develop a liquid debt market for Hong Kong. As you are aware, the Exchange Fund debt programme, which started in March 1990, is part of that effort, although the development of the debt market was not the only objective of the programme. Since then, we have brought to the market a total supply of paper amounting to about $ billion, with maturities ranging from three months to ten years. We have also developed a robust infrastructure for the debt market that is fully integrated with the real time payment system to achieve real time “Delivery versus payment” in the trading of Exchange Fund paper.
First, I will review the conduct and performance of inflation targeting during my time as Governor. This period, which roughly coincides with the post-crisis recovery and which has seen more than its share of shocks and structural developments, provides some insights to the ability of inflation targeting to deliver price stability and support macroeconomic outcomes. I will suggest that, so far at least, inflation targeting has proven to be a framework for all seasons, an essential part of a robust foundation for economic prosperity. It is important not to lose sight of the fundamental success in achieving price stability that has resulted from delegation of inflation targeting to an independent central bank. In the two decades prior to independence, inflation averaged over 6%. Since independence, it has been close to 2% and one-fifth as volatile (Table 1). Inflation expectations have remained well anchored throughout some of the largest economic shocks in postwar history.

People understood the conditionality of guidance, as they and the MPC had learnt that there was still considerable spare capacity in the economy. Chart 7: Interest rate volatility has remained low since guidance was provided Standard deviation of option-implied distributions for 3m LIBOR in 12-months’ time Basis points 180  August 2013 guidance issued  160 140  February 2014 guidance issued  120  EU referendum  100 80 60 40 20  2000  2002  2004  2006  2008  2010  2012  2014  2016  2018  0 2020  Sources: Bloomberg Finance L.P., Chicago Mercantile Exchange (CME), Intercontinental Exchange (ICE) and Bank calculations. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  The improved transparency of the inflation targeting framework also promoted this smooth learning process about the supply side that helped maximise economic outcomes. Starting in 2014, the MPC began carrying out a stocktake of the supply side of the economy each year, publishing its best collective judgments on the natural rate of unemployment, the output gap, as well as the expected growth in productivity, labour supply and potential output.9 As part of these exercises, the MPC revised down its (hitherto private) estimate of equilibrium unemployment rate from 6½% in August 2013 to 5½% in August 2014, 10 though it also judged that spare capacity in the UK economy was gradually being used up as demand was growing rapidly while supply growth was still subdued. In short, spring was gradually turning to summer. II.
The initial portfolio was provided by the government, but since then, Temasek’s funds have come mainly from the investment growth of its own portfolio. Compared to MAS and GIC, Temasek is further out on the risk-return spectrum. How are the OFR managed? Let me now move to the third question: how are the OFR managed? This is the portion of the reserves that MAS is responsible for. There are three prongs to MAS’ approach to managing the OFR robust risk management; balanced asset allocation; and efficient investment process Robust risk management The starting point to MAS’ approach to managing the OFR is its risk management framework, which sets out the liquidity and risk tolerance levels of the OFR. These relate to: the ability of the portfolio to meet liquidity needs under stress conditions; and the maximum loss of the portfolio under tail risk scenarios. These liquidity and risk tolerance levels are determined on the basis of what is minimally required to meet the objectives of the OFR in supporting MAS’ conduct of monetary policy. They are factored in the construction of the MAS portfolio and closely monitored on an ongoing basis. MAS employs a comprehensive range of stress tests to assess the risks to the portfolio on an ongoing basis and establish whether the portfolio remains resilient to potential tail risk events over the medium term.

At the September meeting I considered that the arguments against further interest rate raises were even stronger. Although inflation was high and far above the inflation target, the information received during the summer indicated that inflation would be weaker in the future than we had predicted in July and my assessment was that the risk of contagion effects had also declined. Let me explain my reasoning at the time. There were three main areas where my assessment differed from that of the majority. These were economic activity in Sweden and abroad, the risk of contagion effects from the increases in oil and commodity prices in the world market and to what extent the weak productivity risked leading to inflation effects. Oil and food prices Oil and food commodity prices had fallen slightly during the summer, but were still a good bit higher at the time of the September meeting than they had been a year previously. There was also considerable uncertainty over how they might develop in the future. But my view was that the risk of these prices rising again had declined as a result of the clear weakening in economic activity both in Sweden and abroad. I also assessed that the risk of contagion effects on wages and prices in other areas had declined. I therefore considered that no further increase in the interest rate was necessary to counteract these effects.
However, the analysis is less urgent in other countries, where they have not experienced the same rapid decline in the use of cash. While the value of outstanding cash as a percentage of GDP is just over 1 per cent in Sweden, it is 10 per cent in the Eurozone and a good 20 per cent in Japan. Our Nordic neighbours are also conducting similar analyses because of a decline in the use of cash. Norway and Denmark, for instance, have produced reports and analyses on digital central bank money. The Bank of England and the Bank of Canada have published research articles in this field that analyse, for instance, possible motives for central bank digital currencies and their consequences for monetary policy and financial stability. 6 Central banks in some emerging market economies have also shown an interest in central bank digital currencies. These countries’ motives for being interested in central bank digital currency differ somewhat from our own. One motive is that they see the opportunity to broaden access to fundamental financial services to all parts of the population, that is to say, financial inclusion. Other arguments concern reducing the use of cash, which may be regarded as costly and risky. They also point to the negative environmental aspects of cash and to the fact that it enables money laundering and makes it easier for the black economy. 7 The work that is done is not solely theoretical.

At present, it can take anything from three hours to three days to transfer money between two banks in Sweden. How long the payment takes depends on the time and day that it is initiated. A payment made on a Tuesday afternoon, for instance, will reach its destination around three hours later, while a payment made on a Friday afternoon will not go through until Monday morning. With interbank payments to a country outside of the EU it gets even more complicated. This type of payment currently takes 2-7 days to go through. They can be made more quickly, but this can be expensive. There is thus a major difference between what a consumer expects, given the technology available, and how the systems actually work and I believe that the two must converge soon. Within Sweden there are already instant payments available for individuals through the Swish mobile app. But this system cannot cover all Swedish payments. As the demand for instant payments will increase in the future, the systems must be adapted to manage them better. The Riksbank currently runs the central payment system for large-value payments between the Swedish banks and other major agents. The system has been constructed to manage large-value payments in a secure manner. Individuals’ payments are lumped together into larger amounts before they pass through the system. The Riksbank also has regular contact with all of the participants.
Bank of England  Page 4  The large portfolio of gilts accumulated as a result of quantitative easing (QE) is being run down: since March, by ceasing to reinvest the proceeds of maturing bonds; and, since the start of this month, by selling gilts back to the market. The language surrounding monetary policy has shifted dramatically: from so-called forward guidance suggesting that Bank rate would remain at its effective lower bound until economic slack had eroded, to a more data-dependent outlook for interest rates reflecting current concerns over the persistence of inflationary pressures.2 This substantial shift has been driven by two factors. Normalisation of the monetary policy stance First, the stance of monetary policy needed to be normalised after more than a decade of exceptional ease, originally established in the face of the global financial crisis and then maintained more-or-less until this time last year. (Of course, the ‘normalisation’ implied here relates to historical norms for the level of Bank Rate and size of the Bank’s balance sheet.) With the failure of Lehman Brothers in 2008, Bank Rate was quickly floored at its effective lower bound, and additional easing was then provided through large-scale asset purchases. The resulting highly supportive overall stance was justified by a combination of downside risks to the inflation target, a weak economic outlook and tensions in the financial system, all of which had emerged in the aftermath of the financial crisis.

The MPC had decided to reduce the window over which it averaged UK asset prices in order to construct the conditioning assumptions for its forecast in order to exclude the peak of the market turmoil that had emerged at the end of September and early October. The MPC had delegated responsibility for judging whether markets had become dysfunctional and the operational decisions about pausing QT auctions to the Bank Executive. In particular, Sir Jon Cunliffe’s letters to the Treasury Select Committee (Cunliffe, 2022a,b) and a recent speech by Andrew Hauser, the Bank’s Executive Director for Markets (Hauser, 2022) offer a detailed account of the context and character of recent operational decisions. e.g. in Pill (2010) and Pill (2019). See: Busetto, et al. (2022). See: e.g. Hauser (2021). See Pill (2022). The Bank’s Financial Stability Reports have regularly discussed the risks faced and posed by the NBFI sector, in particular in the aftermath of the so-called ‘dash-for-cash’ episode in March 2020. As reflected in the subsequent discussion, in the Bank of England context, while the responsibility for setting Bank Rate lies wholly with the MPC, the responsibility for conducting asset purchases for purposes other than monetary policy lies elsewhere, likely with the Bank’s Executive.
In turn, the budgetary consolidation measures and the cyclical improvement in the economy have brought about a decline in the public spending/GDP ratio, largely owing to the improvement in spending once interest on debt is discounted. Interest payments as a proportion of GDP held at a similar level to 2013, despite the significant decline in the Treasury’s financing costs, owing to the increase in public debt. The public debt/GDP ratio rose in 2014 to 97.7%, thereby meeting forecasts. The latest Updated Stability Programme (which confirms the deficit targets to 2017) presages a continuing increase in debt this year to 98.9% of GDP, with a reduction commencing in 2016, although the better growth now projected for 2015 may improve these projections. 2  BIS central bankers’ speeches  Private-sector deleveraging Secondly, there has been headway in correcting private-sector indebtedness. Spanish household debt stood at end-2014 at 71% of GDP, 10 pp above the euro area average, when in 2010 we were 20 pp above it; non-financial corporations’ debt stood at the end of last year at 92% of GDP, 8 pp above the euro area average, when in 2010 the gap was 35 pp. In the coming years, the nominal growth of the economy will make for a readier adjustment and will ease the pressure still exerted by past debts on new financing flows. Indeed, new lending was seen to expand in 2014, and this has continued into the opening months of 2015.

Thus, now more-than-ever, macro-surveillance process, early warning models, stresstesting, ever more vigilant risk-based supervision, and strong internal risk management by financial institutions will be instruments crucial for safeguarding our financial stability. In closing this introduction, I am certain that this seminar will be extremely useful and provide an important opportunity for building a close network amongst supervisors in SEACEN, as well as for fostering a closer cooperation between regulators in our region and the US-OCC. So, without further ado, let me declare the second SEACEN-OCC Advanced Seminar on Quantitative Techniques for Macro Surveillance and Determining Resilience of the Banking Sector open, and wish you all every success in this seminar, as well as in your career, and have a pleasant stay in Thailand. Thank you. 2  BIS Review 98/2007
This is why we have defined a second “pillar” for our monetary policy strategy, consisting of a broad range of variables that are referred to as indicators for the euro area price outlook. The relatively low yields on long-term euro-denominated bonds confirm investors’ confidence in the new currency. This was not the case four or five years ago. At that time, financial markets were convinced that the euro would be the weighted arithmetic mean of its legacy currencies and would not inherit the level of confidence and credibility of the strongest of these. The euro has actually been founded on a benchmarking principle, not on a convergence towards an average. This may explain why the interest rates of the euro were the lowest in Europe from the outset. To sum up, we consider the maintenance of price stability over the medium term to be the Eurosystem’s greatest contribution to fostering an environment which is conducive to sustainable growth and employment. And, it is also its greatest contribution to limiting unnecessary volatility of output and employment in the short run. The success, thus far, of our strategy does not mean that our current monetary policy strategy is engraved in the marble. With the benefit of hindsight, 2003 seems the appropriate point in time to take stock of our experience thus far and to reflect on the various elements of the strategy. This issue is actively dealt with our Eurosystem’s staff and we plan to complete this evaluation in the course of the spring and to publish it.

An important objective consists in raising the potential output growth of the European economy If France and Europe seek to secure sustainable growth at levels that are as high as possible, the key variable is potential output growth. There are three ways of raising the level of potential output growth: First, to boost investment: the more we invest and the lower inflationary pressures, the stronger potential output growth. For example, a two-point increase in the productive investment ratio (productive investment / GDP, 11,4 % during the last five years in France) over the next decade would bring about an average acceleration of more than 0,5 point in potential output growth over the same period. The second way of raising potential output growth is to increase the quantity of actual labour: The European Council of Lisbon set as a central objective the rise of the employment rate of our populations from 60 to 70 % in 10 years. The Council also fixed two sub objectives: to raise the employment rate of women to 60 % and employment rate of older workers (from 55 to 64 years old) to 50 %. As a comparison, the same overall employment rate stands at 75 % in the USA. Although some progress has been achieved in this area, the lack of substantive change and the tendency in some member states to continue to use early retirement schemes remain causes for concern.
Let me now conclude by wishing all of you a fruitful and enriching conference ahead and a productive process tapping the international capital markets down the road. Thank you. 2  BIS Review 35/2007

Was the adjustment of the interest rate path in June extreme? Here I intend to focus primarily on the reactions in the financial markets following the monetary policy meeting in June. As you will remember, the Riksbank at that time presented a new forecast for the repo rate. The forecast was on average 50 points above the earlier forecast that we published in our February report. We were then criticised because our revision of the repo rate forecast was greater than one would normally expect during such a short period of time. One observation is that while the revision was large, it was not in any way extreme. If one analyses how the implied forward rates are revised, one can see that the probability of these being revised to a greater degree than the Riksbank's revision of the repo rate forecast between the February and June reports is approximately 20-25 per cent. This means that on every fourth or fifth occasion the market expectations have been revised more than the Riksbank’s revision in June. What had the market agents expected? Another question is how the market agents’ expectations of interest rate developments changed after we had published our forecast in June. Figure 10 shows the expectations of monetary policy that can be understood from the implied forward rates.
oil  Total Projections 120  80  80  40  40  0  0  -40  -40  -80  -80  19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02  120  Source: NB 2000  Legg inn filadresse her  3  BIS Review 121/1999  Projections indicate that revenues will remain at about the same level until around 2008, when they are expected to gradually decrease as petroleum production declines. The Norwegian Government runs a budget surplus including petroleum revenues. The columns show the budget surplus (or deficit), excluding petroleum revenues. The line represents total net government surplus, which is transferred to the Government Petroleum Fund. The surplus also includes yields on Fund investments. We note that the amount of petroleum income used to finance public expenditure varies from year to year, while a large portion of the income is saved. Oil prices and hence petroleum revenues fluctuate over time. Chart 5  The price of crude oil. USD per barrel  50  50  40  40  30  30  20  20  10  10  0  0 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98  Source: Norges Bank Legg inn filadresse her  After a period of high prices in the 1970s, when OPEC first demonstrated its power, and the early 1980s, oil prices have been fairly stable.

The Riksbank (2014a), From A to Z: the Swedish mortgage market and its role in the financial system, Riksbank Studies, April. The Riksbank (2014b), Households’ sensitivity to interest rates, article in Monetary Policy Report, October. The Riksbank (2014c), Appendices to the memo Amortisation requirements – a step towards a more sustainable debt situation, 11 November. 4  BIS central bankers’ speeches