samchain/econo-pairs-v1 huggingface dataset:
The newly formed TMF takes on a much broader mandate in that it focuses not only on the foreign exchange and money markets, but also the debt, derivatives and other treasury markets. With rapid financial innovations and rising demand from customers for a one-stop service, the dividing line between the traditional treasury and trading functions of a bank with other types of financial market services has become rather blurred. In other words, the treasury departments now encompass a wider variety of functions that cut across different markets, notably forex, money, debt and derivative markets. The formation of the TMF, with representatives from the HKCMA and other industry associations, offers great synergy in helping enhance the competitiveness of Hong Kong’s treasury markets, thereby contributing to Hong Kong’s position as the premier international financial centre in the region. In carrying out its work, the TMF focuses on the “3 P’s”. That is: “People”, “Product” and “Profile”. Let me explain further. Firstly, “people”. As with other service industries, financial services are a “people business”. The competitive edge of a financial centre depends largely on the availability of a large pool of highly professional market practitioners. A priority area for the TMF is therefore to work with the industry to enhance the professionalism of practitioners in the treasury markets. As you may be aware, with the support of the TMF, the Financial Markets Association of Hong Kong (ACIHK) has recently launched a new membership regime, together with a revamped professional training and accreditation programme.

In the past year, the TMF also called on the financial regulatory bodies and financial institutions in Beijing and participated in a Financial Services Expo in Shanghai to promote the treasury markets in Hong Kong. In addition to the Mainland, the TMF maintains close contact with our overseas counterparts in the major financial centres, such as the foreign exchange committees in London and New York. The TMF will continue to arrange regular meetings and visits with our overseas counterparts to keep abreast of global developments and to exchange views on matters of mutual interest. Ladies and gentlemen, in less than a year since its establishment, the TMF, with the support from the industry and market practitioners, has made very impressive progress in its work. Looking ahead, with the numerous and valuable opportunities offered by the gradual opening up of the Mainland markets, it is up to all of us to try our best to seize such opportunities to ensure that Hong Kong will remain the hub for financial services and intermediation for Mainland China and the rest of the region. Thank you. 2  BIS Review 6/2005
Hence, the key policy functions of a central bank should perforce be geared towards the attainment of its primary objective and all systems, within and outside, should be aligned to ensure it. It is, therefore, necessary to review and monitor the working of the key policy functions of a central bank continuously in order to diagnose the impending risks and take appropriate prescriptive measures. This function requires a special type of auditing of the key policy functions of a central bank. The irresponsible use of a central bank’s discretionary powers Central banks are privileged institutions in the sense that they can acquire assets by creating liabilities at their own discretion. No other organisation enjoys that kind of a discretionary power. If others are desirous of acquiring assets by assuming liabilities (in other words, by borrowing from others), they have to go along a tedious path. They have to do so by establishing their creditworthiness before prospective lenders and after complying with tedious legal and market-established procedures. The lenders too would lend them not because of being subject to any compulsion, but upon their free will, having assessed the risk and the profitability of the transaction involved. But, central banks could acquire assets just by making book entries. They could issue currency and get others to part with their assets in exchange for that currency.

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But independent changes in monetary policy will ultimately be reflected in inflation and, despite a decline in interest rates that’s now gone on for 20 years, inflation has remained pretty close to target, throughout the developed world (Chart 1). This suggests that, rather than causing the decline themselves, central banks have instead been accommodating a deeper downward trend in the “natural” or “equilibrium” rate of interest. That is not a trivial matter: if they had failed to track this trend, policy would have been too tight and inflation and output too low. And although stocks performed well through the early part of that decline, for much of it they’ve not done so. Chart 2 plots the yield – inversely related to the price – on indexed gilts and UK equities. Through the 1990s these two markets tended to move together and, in price terms, generally upwards. Since around 2001, however, their yields have diverged. Equities have significantly underperformed bonds. This suggests that, over that past decade or so, the forces depressing the natural rate of interest have also been increasing the extra premium required of risky assets. What I want to do today is say something about the causes of these trends and (in only the broadest possible terms) their implications for the distribution of wealth and income. None of this will be particularly novel.

10  BIS central bankers’ speeches  Bernanke B., 2005, “The Global Saving Glut and the U.S. Current Account Deficit”, Remarks at the Sandridge Lecture, Virginia Association of Economists. Broadbent B., 2012, “Costly capital and the risk of rare disasters”, speech given At Bloomberg, London, http://www.bankofengland.co.uk/publications/Documents/speeches/ 2012/speech581.pdf Bunn P. and M Rostom, 2014, “Household debt and spending”, Bank of England Quarterly Bulletin No. 304. Eggertson G. and P Krugman, 2012, “Debt deleveraging and the liquidity trap: a FisherMinsky-Koo approach”, The Quarterly Journal of Economics (2012), 1469–1513. doi:10.1093/qje/qjs023. Elsby M, B Hobijn and A Sahin, 2013, “The decline of the US Labour Share”, Brookings Papers on Economic Activity, Fall 2013. Friedman M. and A. J. Schwartz, 1963, “A monetary history of the United States 1867–1960”, National Bureau of Economic Research Joyce M., N. McLaren and C. Young, 2012, “Quantitative easing in the United Kingdom: evidence from financial markets on QE1 and QE2”, Oxford Review of Economic Policy, Volume 28, No. 4, pp. 671–701. Karabarbounis L and B Neiman, 2013, “The global decline of the labor share”, Quarterly Journal of Economics, 129(1), 61–103, February 2014. Keynes J. M., 1930, “A treatise on money”, New York, Harcourt, Brace and company. Miles, D., 2014, “The transition to new normal for monetary policy”, Speech given at Mile End Group, Queen Mary College in London and available at http://www.bankofengland.co.uk/publications/Documents/speeches/2014/speech707.pdf Woodford M., 2003, “Interest and prices”, Princeton University Press. BIS central bankers’ speeches  11
This relates to an international discussion on whether the policy rate can play a role in stabilising the credit cycle, even when macroprudential policy is in place. 16 One reason why it might play a role is that it can be difficult to design a system for macroprudential policy that functions efficiently enough and cannot be circumvented by innovative market participants. If, for instance, the policy rate is kept low for a long period of time at the same time as macroprudential policy is relatively restrictive, there is a risk that a grey credit market will arise. The interest rate is of course a blunt instrument to use in stabilising the credit cycle, as it has a broad impact on the economy and a substantial effect on the economic cycle. However, one advantage of the broad impact of the policy rate is that it is therefore difficult to “avoid”, even for those who might be able to circumvent macroprudential policy. 17 Some countries are also fairly explicit about giving the policy rate a role to play in subduing the credit cycle, as a complement to macroprudential tools. 18 In the same way as macroprudential policy can help ease the pressure on monetary policy, monetary policy can give support to macroprudential policy by leaning against the wind. Thus, there are a number of questions regarding the interplay between macroprudential policy and monetary policy that require further consideration.

Figure 1 is a good basis when one wants to illustrate different questions regarding monetary policy and central bank operations that have arisen due to the crisis and are now being discussed both internationally and in the debate here in Sweden. The perception prior to the crisis could be described, in a rather simplified, but not misleading, manner as central banks in principle being able to disregard the credit cycle and focus solely on the economic cycle. It was assumed that those cases in which the credit cycle pulls down the economic cycle, which were presumed to be fairly rare, would be relatively easy to manage. Correspondingly, the current international discussion on how central banks should act from now on – the question I began with – can essentially be about how one should take the credit cycle into account in a good way and incorporate it into the economic analysis and into practical policymaking. As the origin of the economic recession is the earlier excessive credit boom, much of the focus is on the question of how one can best ensure that this increase in credit becomes more balanced and that the credit boom thus does not go wrong. It is not merely a question of avoiding crises.
Almost always, in any country the benefits of growth do not reach the deprived segments of the society, quickly. The fact that over 50 per cent of the GDP is still concentrated in the Western Province and the fact that the share of the poorest 20 per cent of country in total household income is less than 4 per cent, shows that this situation is true in our country as well. The per capita income of the Western Province is over US dollars 1,900 whereas in the other provinces it is around US dollars 700-800. Further, the Gini coefficient of per capita consumption in Sri Lanka had increased at an annual rate of 2 per cent, from 1990 to 2000, higher than comparable countries in East Asia. These facts support the view that reducing inequality and alleviating poverty should be a main policy concern that has to be pursued with a pro-active strategy. That is probably why the Mahinda Chantana has identified several policy measures to fast track this shift, that the Western Province’s GDP contribution could continue on a downward trend as evidenced by the marginal decline in contribution from 50.9% in 2005 to 50.1% in 2006. In the meantime, the alternate view in this debate suggests that the more affluent persons of a country usually benefit faster when the economy grows rapidly and that even without any specific policy actions being implemented to address this situation, such gains will ultimately spill over to the deprived segments also, albeit at a slower pace.

The board of directors has an important role to play in establishing the overall culture of an organisation. It is also the ultimate body for resolving the type of complex ethical dilemmas I referred to earlier, and ensuring in particular that the reputation risks in new business strategies or products are carefully addressed. I hope that this conference and my speech, have demonstrated that high ethical standards in banks are neither a luxury nor an abstract ideal. Rather, they are a vital aspect of protecting and enhancing the bank’s brand image, and ensuring its long-term business survival. Behaving ethically is not only the right thing for banks to do, it also makes sound business sense. BIS Review 98/1999  4
Other concerns could include the burdens and deadweight losses associated with reserve requirements, the implications of the framework for the efficiency and resilience of money markets and government securities markets, and the framework’s ability to help support the efficiency and resilience of payment systems. 20  For example, a large supply of “money-like” assets provided by the official sector could crowd out some shortterm private sector liabilities, reducing the amount of maturity transformation in the financial system and improving financial stability. See, for example, Mark Carlson, Burcu Duygan-Bump, Fabio Natalucci, William R. Nelson, Marcelo Ochoa, Jeremy Stein, and Skander Van den Heuvel, “The Demand for Short-Term, Safe Assets and Financial Stability: Some Evidence and Implications for Central Bank Policies,” Board of Governors of the Federal Reserve System Finance and Economics Discussion Series, no. 2014–102, November 2014. 21  Maintaining a large balance sheet in normal times may be perceived as a “slack” variable that invites policymakers to use it for non-monetary policy objectives. See, for example, https://www.philadelphiafed.org/ publications/speeches/plosser/2010/09–24–10_swiss-national-bank. 22  For a discussion of footprint considerations in the design of the Federal Reserve’s overnight reverse repo operations, see Joshua Frost, Lorie Logan, Antoine Martin, Patrick McCabe, Fabio Natalucci, and Julie Remache, “Overnight RRP Operations as a Monetary Policy Tool: Some Design Considerations,” Federal Reserve Bank of New York Staff Reports, no. 712, February 2015.

Carmen’s work reminds us that the financial crisis of 2007/08 was far from unique in economic history. However, when it comes to the coronavirus pandemic, even Carmen concludes that this time truly is different. The global lockdowns imposed as a reaction to the virus are something the world has never seen before. Page 3/4  Today, Carmen will talk to us about monetary policy in times of high public debt. Carmen has published extensively on the various implications of high public debt. For instance, in an influential paper written with Maria Belen Sbrancia, Carmen showed how Western governments managed to repay their debt after World War II through a set of policies known as ‘financial repression’. Measures such as legal ceilings on interest rates and restrictions on international capital flows created an environment where domestic savers had no other option than to invest in low-yielding government debt. Financial repression was particularly effective in liquidating public debt when accompanied by a steady dose of inflation. The relation between monetary policy and government finances is an old and critical issue in central banking. It is also a very timely topic, given the massive increase in public debt that many countries have experienced since the outbreak of the coronavirus pandemic. We are living through times of extraordinary uncertainty. What we can safely assume, however, is that the interplay between monetary and fiscal policy will be among the key challenges that central bankers will face in the years to come.
Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to Scottish business organisations, Edinburgh, 20 October 2009. *  *  *  Two years ago Scotland was home to two of the largest and most respected international banks. Both are now largely state-owned. Sir Walter Scott would have been mortified by these events. Writing in 1826, under the pseudonym of Malachi Malagrowther, he observed that: “Not only did the Banks dispersed throughout Scotland afford the means of bringing the country to an unexpected and almost marvellous degree of prosperity, but in no considerable instance, save one [the Ayr Bank], have their own over-speculating undertakings been the means of interrupting that prosperity”. Banking has not been good for the wealth of the Scottish – and, it should be said, almost any other – nation recently. Over the past year, almost six million jobs have been lost in the United States, over 2½ million in the euro area, and over half a million in the United Kingdom. Our national debt is rising rapidly, not least as the consequence of support to the banking system. We shall all be paying for the impact of this crisis on the public finances for a generation. The United Kingdom faces two fundamental long-run challenges. First, to rebalance the economy, with more resources allocated to business investment and net exports and fewer to consumption.

That is consistent with the need – now widely accepted – to eliminate the large structural fiscal deficit and to raise the national saving rate. It is part of a need for a wider rebalancing of domestic demand in the world economy away from those countries that borrowed and ran current account deficits towards those that lent and ran surpluses. Second, both the structure and regulation of banking in the UK need reform. Banks increased both the size and leverage of their balance sheets to levels that threatened stability of the system as a whole. They remain extraordinarily dependent on the public sector for support. That was necessary in the immediate crisis, but is not sustainable in the medium term. These two challenges are interrelated. In creating the crisis, imbalances in the world economy led to unusually low real interest rates and large net capital flows from the emerging market economies to the developed world. That provided the fuel which an inadequately designed regulatory system ignited to produce the financial firestorm that engulfed us all. If our response to the crisis focuses only on the symptoms rather than the underlying causes of the crisis, then we shall bequeath to future generations a serious risk of another crisis even worse than the one we have experienced. Tonight I want to focus on the second of those challenges – reform of the structure and regulation of the banking system.
Without non-standard measures, we estimate that we would have had to lower key rates by around 100 basis points in June 2014 to achieve a similar effect on bank interest rates. This has also helped to stimulate lending to the real economy: in the euro area, outstanding loans to businesses have gone from a contraction of –2.5% in June 2014 to growth of 0.6% in January 2016. The impact is even more marked in France, where outstanding business lending grew by 4.8% year-on-year in the first month of 2016 – the highest pace of growth in the euro area and, what’s more, with the lowest rates of interest. Convergent estimates from the ECB and the Eurosystem indicate that, all other things being equal, the measures introduced since June 2014 should add 1 percentage point to inflation over the period 2015–2017, with a similar impact on growth. In France, they helped to boost 2015 growth by 0.3 percentage point, and estimates from INSEE even put the impact slightly higher at +0.4 pp. That represents about 80,000 additional jobs for the economy – although only structural reforms can generate lasting gains for a country’s growth and employment. To conclude on this estimate of effectiveness, the IMF – regarded as an objective judge of the relevance of economic policies – was unequivocal in its assessment at the last G20 meeting in Shanghai at the end of February, saying, “The ECB’s asset purchase programme has supported the recovery by improving confidence and financial conditions [and] monetary policy should remain accommodative”.

It is to encourage banks to lend to corporations, SMEs and households alike; similarly, extending the asset purchase programme to corporate bonds will be of particular benefit to large French corporations. In other words, we are securing the provision of credit to businesses and households, and protecting it from tensions linked to market volatility. c) Now, what about the risks? I talked earlier about the risks of doing nothing: we need to take action in order to bring inflation back up towards 2%. That said, we also need to keep a close eye out for any possible negative side-effects of our monetary policy, notably for financial stability. We are actively monitoring the financial cycle, including in France where the task falls to the High Council for Financial Stability set up in 2013. I took part in its 8th meeting at the Finance Ministry last week. For the time being, there are no signs of bubbles forming in our main financing markets: on the whole, developments in the equity markets appear in line with corporate profit forecasts, while evolutions in bond yields also seem consistent with the outlook for inflation and growth. Nor are there any signs of excessive credit growth in the financial system. Nevertheless, we remain vigilant over all aspects of the current macroeconomic and financial environment.