samchain/econo-pairs-v1 huggingface dataset:
First, when the sovereign debt crisis intensified, haircuts on government bonds under stress also went up because the rise in yields reduced their collateral value. For example, when the spread on Italian ten-year government bonds relative to core issuers rose to over 450 basis points in November 2011, the haircut for Italian government bonds was increased by 500 basis points, leading to a posting of intraday margins about 12 times greater than in any other preceding month in 2011. On the day of the increased haircut alone, the spread between Italian and German government bonds rose by 60 basis points. In addition, margin increases generally reduce the amount that a repo seller can borrow, which might increase the seller’s probability of default. This can trigger a negative feedback loop: increases in the probability of default might cause repo buyers to increase the haircuts imposed on the seller, which reduces the amount the seller can borrow (when it needs to borrow subsequently), and so on. 10 The ECB/Eurosystem has been successful in easing market tensions using standard and non-standard tools. However, the underlying structural problems which relate to uncertainty about risk, whether in the form of counterparty, credit, liquidity or redenomination risk, need to be solved. When implemented, the Single Supervisory Mechanism will play a key role in comforting confidence in euro area banks and re-establishing cross-border liquidity flows within the region. Market re-integration has now started. It will succeed only if it is supported by continued efforts by governments to bridge fiscal and competitiveness imbalances.

To sum up, the economic analysis indicates that we may experience a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below, but close to, 2% later on. A cross-check with the signals from the monetary analysis confirms this picture. As regards fiscal policies, the Governing Council welcomes the European Commission’s assessment of the 2014 draft budgetary plans which were submitted in October for the first time under the “two-pack” regulations. This new surveillance exercise needs to be fully effective. In order to put high public debt ratios on a downward path, governments should not unravel their efforts to reduce deficits and sustain fiscal adjustment over the medium term. In  2  BIS central bankers’ speeches  particular, consolidation measures should be growth-friendly and have a medium-term perspective, so as both to improve public services and minimise the distortionary effects of taxation. At the same time, there is a need to push ahead with product and labour market reforms, in order to improve competitiveness, raise potential growth, generate employment opportunities and foster the adaptability of our economies. We are now at your disposal for questions. BIS central bankers’ speeches  3
Le lancement d’un indice de taux d’intérêt au jour le jour, l’EONIA, a déjà montré toute sa portée en donnant une représentation précise des conditions du marché monétaire dans l’ensemble de la zone euro ; il constitue un repère très utile pour les opérateurs de marché et les agents économiques ainsi que pour la BCE qui l’utilise comme référence dans une grande majorité de contrats et d’opérations. II POUR QUE LE SUCCÈS DE L’EURO SOIT COMPLET, IL FAUT RELEVER UN CERTAIN NOMBRE DE DÉFIS L’introduction de l’euro constitue en soi une réforme structurelle majeure. Mais elle ne sera couronnée de succès que si un certain nombre de conditions, notamment des réformes structurelles, sont remplies et si l’euro s’incarne dans le comportement des dirigeants du monde politique et des affaires ainsi que dans celui des entrepreneurs, des consommateurs et, par-dessus tout, de nos concitoyens. A. Pour assurer le plein succès de l’euro, les pays européens doivent remplir quatre conditions Il y a quelques années, il a fallu convaincre un grand nombre de sceptiques, tant en Europe que dans le reste du monde, que le projet de l’euro était viable. Nombreux étaient ceux qui en dénonçaient les prétendues contradictions et incohérences : par exemple, l’impossibilité de doser de manière convenable les politiques monétaire et budgétaire en l’absence d’une fédération politique ; l’impossibilité d’éviter des “ chocs asymétriques ” (c’est-à-dire des difficultés frappant l’économie d’un pays membre de l’Union et pas les autres) ; l’insuffisance de flexibilité et de mobilité réelle de la main-d’œuvre dans les pays européens, etc.

III LE SUCCÈS DE L’EURO APPORTERA UNE CONTRIBUTION MAJEURE À L’AMÉLIORATION DE L’ÉQUILIBRE ÉCONOMIQUE ET MONÉTAIRE MONDIAL Dans la situation économique globale actuelle, le succès de l’euro va beaucoup aider à la fois l’Europe et le reste du monde, qui vont tirer profit de la prospérité et de la croissance européennes, éléments essentiels de la bonne santé de l’économie mondiale. Il est clair que le nouveau cadre monétaire européen a et aura des conséquences de grande portée non seulement pour l’Europe et sa population, mais aussi pour l’économie mondiale et la communauté internationale. La contribution de la zone euro à la stabilité internationale peut être appréciée à l’aune du développement de relations économiques équilibrées au sein de la zone euro et avec les pays extérieurs à la zone euro, et à celle du renforcement de la stabilité monétaire et financière internationale. A. L’établissement de relations économiques équilibrées a) Les relations entre l’Union monétaire et les autres États européens seront fondées sur la coopération. La coopération se traduira principalement par la coordination des politiques économiques des 15 États de l’Union européenne. Une telle coordination est requise par le Traité et elle est nécessaire pour que l’Union européenne fonctionne de manière satisfaisante au niveau économique.
As operators of public infrastructure, we have a similar role to play for payment systems. We build infrastructure, add new functionality and set standards and policies to underpin safe and efficient economic and social activity. To do so effectively, we need to listen to and collaborate with the whole industry: ensuring that public and private sector innovation is coordinated. Infrastructure is only valuable if sufficient users can access it. As a public authority, we want to encourage fair and open competition with proportionate barriers to entry. A road is only useful if a wide range of people and vehicles can drive on it. Overly restrictive access policies can be a barrier to innovation, increase tiering and lead to more expensive services for end-users. Just as we need some restrictions on roads, such as preventing heavy vehicles from using weak bridges, and ensuring vehicles have passed appropriate tests, appropriate safeguards are needed in the access criteria for payment systems. There are two key ways to make central bank money more accessible while managing risk. The first is enhancing the access policy, including clear criteria . In 2017, the Bank of England opened direct access to settlement accounts to non-bank Payment Service ProvidersOpens in a new window – half a dozen or so have already joined. In 2021, we launched an omnibus account policy offering to innovative high-value payment services, underpinned by the security of central bank money. Omnibus accounts can enable market participants to develop new payment systems, or allow existing systems to settle more securely.

How payment services and user needs are evolving Technology continues to transform retail payments: the way we pay for goods and services has changed dramatically over the past decade or so. In many countries, you can now pay for your tea and cake with a smartwatch, or send your friends a ‘payment request’ with a few taps to split a bill at a restaurant. Many people’s wallets are now virtual rather than physical. Innovation has expanded the frontier of what is possible and provided many of us with access to faster and simpler payment services. It is not just the private sector that is innovating. The changing user demand for electronic payments is inspiring central banks to consider the future of payments. A topic of intense interest is Central Bank Digital Currencies (CBDCs). CBDCs (particularly retail CBDC) could create a new form of digital money, issued by the central bank, and available for households and businesses to use. Whether to issue a CBDC, for which use cases, in what form, and with what consequences are all major questions currently being considered by central banks and governments across the globe. No decisions have been made in the UK and we continue to work closely with a wide range of stakeholders to develop a clear understanding of the potential implications: positive and negative. The Bank of England and HM Treasury will consult later this year on the assessment of the case for a retail CBDC in the UK, including scope for further work.
The Riksbank is monitoring developments closely, but our assessment is that at the moment there are no funding problems for the Swedish banks on the international capital markets. To sum up we can say that the turbulence around the world will have a dampening effect on Swedish growth in the period immediately ahead. The clearest signs of this so far are the weak stock market in Sweden and the dramatic decline in the confidence of the households and companies, which is reducing demand. How can we ourselves facilitate developments in Sweden? We have laid stable foundations – which we must build on Although we are dependent on what happens abroad, we must do what we can to keep the economy on an even keel in Sweden. We can compare the situation to our own personal finances. Various external circumstances that we have no control over can undermine our financial situation. However, if we have had a firm grip on our personal finances before this happens, we will be better prepared and have a better chance of managing the situation. But how can we relate this to the Swedish economy as a whole? If we return to Figure 7 we can see that labour costs over the last 10 years or so have increased more slowly in Sweden than in the euro area. We can also go back to Figure 9.

Stock market falls creating uncertainty There are now strong international links between the financial markets. Share prices have fallen dramatically in Sweden as in a number of other countries (see Figure 1). This in turn has had a highly-negative impact on the confidence of Swedish households and companies (see Figure 12). We could say that a “wait-and-see” attitude is guiding the households and companies at the moment. The households are saving more and investment is weak because people are simply waiting to see what happens in the present uncertain climate. The banks may find it more difficult to get funding The Swedish banks form another channel through which the increasing unease abroad may have an impact in Sweden. In this connection it is worth pointing out that the Swedish banks have little direct exposure to the countries in southern Europe that are experiencing publicfinance problems and that they are well capitalised compared to banks in other countries. So, what are the risks? Traditionally, the Swedish banks’ lending has been largely funded by deposits from Swedish bank customers. However, in recent years an increasing share of the funding has instead taken the form of market funding, often in foreign currencies (see Figure 13). A greater degree of stress in the financial system may reduce the effectiveness of these markets. This may in turn affect both access to and the price of the Swedish banks’ market funding, even if the cause of the stress lies outside Sweden.
More than four-fifths of that assessment rests on the extent of non-traditional non-insurance activities in a firm’s business model and on its interconnectedness to the wider financial system. Nine firms have been designated. It is vital that these systemic insurers, like systemic banks or financial market infrastructure, can be resolved in the event of failure without the need for taxpayer support and without disruption of the wider financial system. That’s why the development of resolution plans is a top priority. Nonetheless, given the externalities from the failure of a systemic insurer, it is of course preferable that their probability of failure is lower. That’s why systemic insurers will be subject to higher global standards. The Higher Loss Absorbency requirements, being developed now by the IAIS, will ensure that all of the activities of a systemic insurance group – but especially non-traditional, noninsurance activities – are backed with an appropriate minimum level of capital resources. Given the patchwork of capital standards across major jurisdictions, the first step towards applying these heightened resilience requirements is the development of the Basic Capital Requirement – an internationally comparable capital measure that will act as the baseline for additional resilience. Last week in Cairns, the FSB approved the final BCR proposal which will be presented to G20 Leaders at the Brisbane summit in November. It is simple and factor-based, contains a common valuation approach, and captures all activities of insurance groups.

Perhaps, even more important, one of the key benefits of ensuring that certain creditors know they can be bailed in is that those creditors have a much stronger incentive to monitor and, if necessary, constrain the risks banks are taking.13  Transition to new resolution regime Moving to an effective resolution regime, including for the largest cross-border banks, will require a major transition. Many larger banks will need to make changes to their structure and financing. There will inevitably be higher costs as the implicit public subsidy is removed. There is no free lunch. This transition needs to be carefully managed. So in conclusion, I want to set out the principles that the Bank of England is following to guide the implementation of the new regime. Proportionality First and perhaps most important is proportionality. The resolution requirements for a bank should be what is necessary to deliver the resolution strategy for that bank – no more and no less. 12  See Bank of England (2015). 13  The Financial Stability Board has calculated that a withdrawal of government guarantees could reduce banks’ probability of failure by a third. This draws on evidence in IMF and Fed NY working papers that evaluate the relationship between the ‘government support assumptions’ that rating agencies express and measures of bank risk-taking. BIS central bankers’ speeches  7  Large banks cannot be allowed abruptly to cease operating. They have to be stabilised and resolved. Resolution is not resurrection. It takes time.
Such low real interest rates would normally lead to GDP and inflation abroad being unreasonably high. If reality and models differ, it is in my opinion reality that applies. In the current abnormal times, models and historical patterns do not work so well and should to a great extent be replaced by judgement. In my opinion, the forecasts for inflation and GDP abroad under the current abnormal circumstances are compatible with the low interest rates abroad. Monetary policy alternatives in October I would thus claim that the assumption in the main scenario that policy rates abroad will be high is unrealistic, and that it is more reasonable to assume a forecast for policy rates abroad that is compatible with market expectations of interest rates abroad. This also means assuming the prevailing actual long interest rates abroad with regard to the effect on the exchange rate. Figure 9 shows monetary policy alternatives, all under the assumption of a forecast for policy rates abroad in line with market expectations, that is, a forecast for policy rates abroad that follows the grey curve in Figure 7. Figure 9a shows different interest rate paths. The red broken curve, called “Main scenario repo rate path”, is the main scenario’s repo rate path. The blue broken curve, called “Riksbank’s reaction function”, shows the repo rate path arising from the Riksbank’s historical reaction function when policy rates abroad are compatible with the prevailing market expectations. The yellow broken curve, called “Market repo rate path”, shows the prevailing market expectations for the repo rate.

However the unexpected referendum result in favour of leaving the EU has impinged strongly on the financial markets and it is still too early to gauge how the stability and recovery of the euro area will be affected. The global Great Recession and sovereign crisis combined to make the past decade that of the lowest growth of the euro area since the Second World War. It is what the International Monetary Fund has so graphically summarised with the expression “too slow for too long”. At the same time, inflation has remained far from the medium-term monetary policy target. The exceptionality and nature of the imbalances built up, particularly the high private and public indebtedness, not only hinder the ability of economies to grow and reduce their unemployment levels, but also limit the room for manoeuvre of countercyclical economic policies, at least within their conventional framework. This has led the European Central Bank to assume leadership in the response to the crisis. The magnitude of the structural challenges facing the euro area is notable. Some are due to design failures in the current operational framework of the Monetary Union and of the European Union itself, and others to the absence of a sufficient will to press for reform, all failures and absences that have eroded European citizens’ confidence in the integration process. Against this background, I would like to focus my comments on the difficulties facing economic policy as it attempts to put the euro area recovery on a firm footing.
Secondly, it is important that the authority that is given responsibility for macroprudential policy is also equipped with the right tools, that is, given the possibility to intervene at an early stage when risks that could lead to negative effects on the Swedish economy have been identified. Sweden’s place in the global financial system and our domestic conditions mean that we cannot delay any longer in designing a framework for financial stability and macroprudential policy; we need to get this in place as soon as possible. ...and we need an even better analytical base However, to be able to make the best possible analyses and thus design effective tools to counteract the risks of high indebtedness, we also need to have better statistics on household borrowing. This has also been pointed out by both the IMF and the European Commission in their assessments of the Swedish economy.5 As a preliminary step towards improving the analytical base we at the Riksbank have asked the Swedish banks to provide us with data on households’ loans. The data collected by the Riksbank will be used to analyse how vulnerable the Swedish households are and how potential risks are distributed among the population. Finansinspektionen already makes good  5  “Sweden – 2013 Article IV Consultation: Concluding Statement of the Mission”, IMF, 31 May, 2013. “Council Recommendation (COM(2013) 377 final)”, European Commission, 29 May, 2013. BIS central bankers’ speeches  5  analyses and have on several occasions gathered random samples among newly-granted loans.

On the downside, concerns remain relating to renewed tensions in some financial market segments and related confidence effects. In addition, a stronger or more protracted than expected negative feedback loop between the real economy and the financial sector, renewed increases in oil and other commodity prices, and protectionist pressures, as well as the possibility of a disorderly correction of global imbalances, may weigh on the downside. With regard to price developments, euro area annual HICP inflation was 1.6% in May 2010, according to Eurostat’s flash estimate, after 1.5% in April. The rise in inflation over recent months mostly reflects higher energy prices. During the second half of this year some further slight increases in HICP inflation cannot be excluded. Looking further ahead, inflation rates should overall remain moderate. Upward pressures on commodity prices may persist, while euro area domestic price pressures are expected to remain low. Inflation expectations over the medium to longer term continue to be firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term. This assessment is also reflected in the June 2010 Eurosystem staff macroeconomic projections for the euro area, which foresee annual HICP inflation in a range between 1.4% and 1.6% for 2010 and between 1.0% and 2.2% for 2011. Compared with the ECB staff projections of March 2010, the ranges have been adjusted somewhat upwards, mainly reflecting higher euro prices for commodities. Available forecasts from international organisations provide a broadly similar picture.
With the economy gaining strength, macro policies such as the OPR must be adjusted. This is necessary to ensure that our broad macro policies match our economic realities. At the same time, we recognise that although the overall economy is in good health, there are some who are still facing economic challenges. However, given that the OPR is by design a blunt tool to deliver price stability, more targeted measures are in place to help those who may be facing difficulties in meeting their monthly loan repayments. Help continues to be available through banks or AKPK, which can work out new repayment arrangements tailored to individual circumstances. In this way, policies can work to deliver what the economy needs. By acting sooner rather than later in managing inflation, we have been able to move in a measured and gradual way, avoiding large and more disruptive adjustments which would have been much more costly for the economy. We are still experiencing high and elevated inflation, partly due to strong demand. Yes, some cost pressures are coming down, but it has not translated to the final prices of goods because demand remains high. The cost of making nasi lemak has probably eased but with people still queuing as far as 100 metres for Akak Nasi Lemak, as widely shared on TikTok, prices are unlikely to come down as long as demand stays strong. If we do not manage excessive price pressures like we see in some other economies, this will affect everyone through lower purchasing power.

Nor Shamsiah Mohd Yunus: Welcoming remarks - BNM Sasana Symposium 2023 Welcoming remarks by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the BNM Sasana Symposium 2023, Kuala Lumpur, 8 June 2023. *** Distinguished guests, central bank officials and payment system operators from Indonesia, Singapore, and Thailand, ladies and gentlemen. Assalamualaikum warahmatullahi wabarakatuh and good morning. Welcome to the inaugural BNM Sasana Symposium! Every year, in March, Bank Negara Malaysia publishes our Annual Report, along with the Economic and Monetary Review, and the biannual Financial Stability Review. We also publish our Quarterly Bulletins. These reports describe how we have discharged our mandates over the past year, and provide our thinking, analyses and assessments on the economy and financial system. In the reports, we also discuss important ideas and pressing issues affecting the economy and financial sector in feature articles that help inform and shape long-term initiatives that are necessary to strengthen our economic fundamentals. One of the ways we hold ourselves accountable to the rakyat through our flagship publications is by explaining the key considerations behind the decisions and measures that we take, and the priorities that guide our work. Often, this involves complex policy trade-offs that have to be carefully balanced from many angles. Our reports, as well as any communications from us, such as our Monetary Policy Statements, often generate lively conversations all around the country – in the press, on social media, and at the dinner table.