samchain/econo-pairs-v1 huggingface dataset:
Yeo Lian Sim: Hedge funds - a mainstream alternative Keynote address by Ms Yeo Lian Sim, Deputy Managing Director (Market Conduct) of the Monetary Authority of Singapore, at the Hedge Funds World Singapore 2002, Singapore, 19 September 2002. *  *  *  Good morning, Ladies and Gentlemen  A decade of controversy and rapid growth Ten years ago this month, speculation that Europe’s Exchange Rate Mechanism (ERM) would be realigned gained momentum and the British pound came under intense pressure in the foreign exchange markets. The rest, as they say, is history. Hedge funds have come a long way since the Sterling attack. They have been linked to other instances of market turmoil, like the Mexican Peso meltdown in 1994-95 and the Asian financial crisis of 1997-98. Studies have revealed little evidence that hedge funds were mainly responsible for those episodes. But their participation is not in dispute. Also in 1998, we saw the near collapse of Long Term Capital Management and its subsequent recapitalisation by a consortium of banks brought together with the help of the New York Fed. The incident raised questions about the risks that large and highly leveraged hedge funds pose to systemic stability. It was to address these concerns that the Financial Stability Forum (FSF), of which Singapore is a member, set up a working group on Highly Leveraged Institutions (HLIs).

In March 2000, the group issued a sobering reminder: institutions that provide leverage to HLIs must improve their counterparty risk management and hedge funds need to enhance their disclosures. Along with these developments, or some say in spite of them, the hedge fund industry has continued to grow from strength to strength. There are now about 6,000 hedge funds worldwide, managing more than $ billion. In 2001, some $ billion of new capital was invested into hedge funds. By 1 comparison, the entire industry was only $ billion in 1990 . While high net worth individuals remain the main source of capital, hedge funds are becoming more popular among institutional and retail investors. Funds of hedge funds and other hedge fund-linked 2 products are increasingly being marketed to the retail market . For example, ABN Amro launched the first retail fund of hedge funds in Singapore last month. There are a number of factors behind the meteoric rise in demand for hedge funds. The unprecedented bull run in the US equity markets during the 1990s swelled investment portfolios. This led both fund managers and investors to become more keenly aware of the need for diversification. Hedge funds are seen as a natural “hedge” for controlling downside risk because they employ exotic investment strategies believed to generate returns that are uncorrelated to traditional asset classes.
During the same period, the average inflation in emerging market economies with inflation targeting rose from 3.4 percent to 6.1 percent. Figure 6: S&P Goldman Sachs Commodity Price Indices  750  550  Commodity Prices Metal Prices Energy Prices (right axis) Agricultural Prices (right axis)  675  450  600 525  350  450  5  250  375  3/12/2008  11/14/2007  24-07-2007  29-03-2007  01-12-2006  09-08-2006  150 17-04-2006  300  Source: Goldman Sachs. Figure 7: Inflation in Other Countries a. Inflation Rates  b.Diff. Between Turkey and Other Emerg. IT’ers*  9  Developed Economies Developing Economies Turkey  02.08  12.07  10.07  08.07  06.07  04.07  02.07  12.06  10.06  08.06  06.06  01.08  11.07  2  09.07  0 07.07  3  05.07  2 03.07  4  01.07  4  11.06  5  09.06  6  07.06  6  05.06  8  03.06  7  01.06  10  04.06  8  02.06  12  12.05  14  *Sample of emerging economies under inflation targeting covers Brazil, Czech Republic, Colombia, Philippines, South Africa, Israel, Hungary, Mexico, Peru, Poland, Romania, Chile, Slovakia and Thailand. Source: Web sites of central banks, IFS, TURKSTAT, CBT  BIS Review 62/2008  5  2.

Therefore, the materialization of upside risks would require further tightening of the monetary policy stance, while downward surprises in food and energy prices would be perceived as an opportunity to bring inflation back to the target in a shorter period. Figure 15: Inflation Alternative Scenarios  Forecasts,  Base  Scenario  Medium Term Target  Base Scenario  Pessimistic Scenario  Optimistic Scenario  and  12  10  Percent  8  6  4  2  12  2011-I  2010-IV  2010-III  2010-II  2010-I  2009-IV  2009-III  2009-II  2009-I  2008-IV  2008-III  2008-II  2008-I  2007-IV  0  BIS Review 62/2008  A protracted period of rising food and energy prices have led to significant breaches in inflation targets since the adoption of the inflation-targeting regime and consequently increased the stickiness in inflation expectations, as economic agents have become more backward looking. Under normal conditions, supply shocks are expected to alter relative prices rather than the underlying inflation trend. Nevertheless, the fact that several longlasting shocks appeared concurrently has increased the risks to price setting behavior. As a matter of fact, recent studies by the Central Bank reveal that economic agents have been increasingly grounding their expectations on past inflation figures. In this respect, recent developments in the pricing behavior and the underlying inflation trends are of particular concern. It may be necessary to pursue a tighter monetary policy should the price setting behavior deteriorate.
I will talk about where we are in this process and some of the priorities for policy frameworks as well as for the management of risks by financial institutions as we move forward. This, I hope, will provide useful inputs for your deliberation and discussion in this conference. The case for greater financial integration ASEAN is home to more than 600 million people and if considered as a single entity, would represent the sixth largest economy in the world with a combined GDP of USD2.5 trillion. According to the OECD, the region is projected to sustain an average annual growth of 5.6%  BIS central bankers’ speeches  1  over the next four years and is expected to be the fourth largest trading bloc by 2050. Concurrently, the standards of living among the general populace will continue to improve. Household purchasing power has risen significantly over the last decade, transforming the region into a thriving hub of consumer demand. The size of ASEAN’s consuming class is expected to double from 81 million to 163 million by 2030. By 2020, Asia is estimated to account for more than half of the total global middle class population, with ASEAN representing more than USD2 trillion of additional consumption within the region. Also, as the sources of economic growth become increasingly domestic-based, this enables many economies to diversify their sources of growth. An important development is the significant increase in intra-regional trade.

Best practices and innovative products from one part of the region can also be deployed to other parts of the region, to tackle a common need or challenge. An area that has considerable potential, both to support, not only greater regional financial integration but also for the development of national financial systems, is the establishment of credit reporting infrastructure. For example, the implementation of the Central Credit Reporting Information System in Malaysia, one of the most comprehensive in the world, has had a profound impact in transforming the credit landscape in Malaysia by improving efficiency and productivity, enhancing access to financing, strengthening risk management and encouraging responsible borrowing. These benefits can be extended more broadly by establishing and linking up similar systems across the region through collaborative efforts. The potential also exists for similar infrastructure to be developed in the insurance sector which can serve to strengthen underwriting assessments, and allow loss data such as for catastrophes to be shared more efficiently. Importantly, developments in this area will greatly advance financial inclusion and contribute towards narrowing the development gap among and within ASEAN economies. Key achievements in financial integration Let me now turn to where we are in the financial integration process. Consistent with a flexible and pragmatic approach which has been adopted for ASEAN, implementing the integration process within ASEAN is grounded on the state of readiness of each member country. Member countries are given flexibility to ensure that the integration process is sustainable and meet national policy objectives.
The IEO’s review noted that “a common finding across successive rounds of QE is that the Bank has excelled at delivering at pace and under pressure, drawing on very effective staff input from multiple areas.” Never has that been more apparent than the response of Bank staff to the Covid crisis, with close to 600 balance sheet operations conducted across multiple interventions during the course of 2020, the vast majority of which conducted at home, including QE, where we purchased at the fastest pace ever in the early stages of the crisis. Figure 4: Recommendations from the IEO review of QE  8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  It is understandable that a relatively new policy tool, used on such a large scale, has attracted significant public attention, in addition to the IEO evaluation, whose recommendations are set out in Figure 4. Indeed the House of Lords Economic Affairs Committee is currently taking evidence for its own QE inquiry.15 These evaluations and inquiries, and the broader public debates around QE, are welcome – they are an important part of the process by which policymakers like myself are held accountable. I see them as a key part of the process by which we learn more and develop our understanding of tools like QE. I should be clear at the outset, though, that I am confident that QE works as intended as a monetary policy tool.

Peter’s review of “What’s the Use of Economics”, the book of proceedings from a conference organised and edited by Diana Coyle, another former student who gave the second of these lectures, held at the Bank of England nearly a decade ago, is Peter at his kaleidoscopic best and as relevant now as when he wrote it. 2  For me as an undergraduate student in the early 1980s it was incredibly stimulating to be learning from Peter about Keynes’, Hicks’ and Leijonhufvud’s contributions to disequilibrium economics, all framed by Peter’s  own quantity rationing exposition of multiple equilibria. It was even more exciting to be taught by someone who was writing about the real-world economic problems of unemployment and how policy could help to achieve a better equilibrium – Peter penned a comprehensive overview article with Derek Morris in the second edition of OxRep in 19853 which is still a very good read today.4  It should therefore come as no surprise that one of the many other topics that Peter turned his prodigious mind to was QE and monetary policy.
For the gold sales it was planning, the SNB was allocated a quota not claimed by other central banks that were party to the agreement of 2004. The SNB has chosen an approach for its gold sales that will avoid market unrest, with regular sales transactions. The Swiss National Bank holds currency reserves in the form of foreign currency and gold, thereby ensuring that it has room for manoeuvre in its monetary policy at all times. As a result of the sharp rise in the price of gold, the proportion of the currency reserves held as gold has increased by about a quarter since mid 2005, from 33% to the current level of 42%. The purpose of the SNB's gold sales is to rebalance the composition of currency reserves with respect to its monetary policy requirements. Moreover, by reducing its gold reserves and increasing its foreign exchange reserves, the overall risk on SNB assets will decline. Once the sales have been completed, the Swiss National Bank's gold holdings will amount to some 1,040 tonnes. 2. Swiss Interbank Clearing (SIC) to celebrate its 20th anniversary  Over the next few days, the Swiss Interbank Clearing System SIC will celebrate its 20th anniversary. In 1987, the introduction of the SIC payment system represented a revolution for Swiss payment transactions. SIC was one of the first payment systems in the world of the type known as Real Time Gross Settlement (RTGS).

Thomas Jordan: Currency reserve adjustments, the SIC payments system and financial market developments Introductory remarks by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Berne, 14 June 2007. *  *  *  In my remarks, I would like to address three topics. First, I will speak about the adjustments in the composition of our currency reserves. Then, I would like to comment on the Swiss Interbank Clearing (SIC) payment system and its twenty years of existence. At the end, I will say a few words about developments in the financial markets. 1. Adjustments in the composition of currency reserves  The Swiss National Bank is adjusting the composition of its currency reserves. Before the end of September 2009 it will sell 250 tonnes of gold and increase its foreign exchange reserves by a corresponding amount. The overall level of currency reserves will remain unchanged. The gold sales fall within the bounds set by the second Gold Agreement of 8 March 2004, in which the central banks of the Eurosystem, plus the Sveriges Riksbank and the Swiss National Bank, agreed to limit their gold sales over a period of five years, beginning on 28 September 2004. The Gold Agreement specifies that annual sales by all signatories may not exceed 500 tonnes and that the total sales volume over this period shall not amount to more than 2,500 tonnes.
The interest rate decision in September Let me move on to the stance I took at the most recent monetary policy meeting around a month ago. I, like the rest of the Executive Board, then voted to raise the repo rate by 0.25 percentage points. At the same time, my assessment was that the forecast for the repo rate that we made in June still appeared reasonable. Today I shall return to why I made this assessment. Increased uncertainty abroad… On the whole, my view in September was that international growth was good and had not changed significantly since June. But this does not prevent the view of growth in some individual countries having changed in important respects. In September our assessment was that growth would be lower than we had expected in June, in the United States in particular, but also in Europe. At the same time, developments were slightly stronger in a couple of our neighbouring countries and in several emerging markets. However, the international risk outlook had changed gradually in connection with the rising unrest in the financial markets. The change in the risk outlook largely originated in the United States. There the problems in the housing market had worsened and according to several statistics house prices in the United States fell on average, measured as an annual change. The question we asked ourselves at the September meeting was to what extent the problems would spread and slow down activity in the rest of the US economy.

We will have a better internal base for making decisions. In addition, if we manage to succeed in communicating how we see the driving forces behind economic developments and also the objective and effects of monetary policy, it will also be easier for others to assess how new information will affect the future development of the repo rate. If it becomes clearer to the general public and financial market agents how we view future interest rate developments, this will give us better tools for influencing expectations of the future repo rate. By affecting expectations of short-term interest rates, we as the central bank can also indirectly affect interest rates with a slightly longer duration, which in turn increases the effect of monetary policy. As I said, monetary policy largely works by influencing expectations of future repo rates. When we based our forecasts on market expectations of the repo rate we could only indirectly express our view of the interest rate path by commenting on market pricing. For several reasons this was not very clear. One reason is that there is no clear-cut method for measuring expectations of the repo rate on the basis of market pricing. Different securities differ from one another with regard to duration, credit risk and liquidity, which makes the calculations complicated. Different calculations give different results without any of them being clearly better than the others. Another reason for the lack of clarity was that market expectations could change quickly.
Securitization markets developed where loans could be funded through the market by investors. In addition, money market mutual funds, securities lenders, institutional investors and businesses needed a safe way to deposit funds where they would earn interest but retain ready access to their funds. Repurchase agreements or “repos” developed to serve this need. A repo is a short-term collateralized loan that shares many characteristics with a demand deposit except that repos are not guaranteed. At the same time, large firms increasingly raised funds by issuing commercial paper in the market rather than relying on bank loans – with the money market mutual funds being large investors in this paper. Large banks, as well, came to rely at the margin on non-deposit funding through the interbank funding market. The Fed acted as the lender of last resort for this market. This system of market-based credit intermediation has been called the “shadow banking system”. The shadow banking system grew at a very fast rate over the past several decades. Chart 1 shows that by 1990, mortgage originations in the shadow banking system equaled originations in the banking system, and grew to more than double the level in the banking system by 2008. Chart 2 highlights the growth in securitization across many different asset categories besides residential mortgages, such as commercial real estate loans, auto loans, credit card loans and student loans.

The vast majority of subprime loans were financed by investors through placing the loans into securities that were sold onto the market. Most of the securities derived from these subprime mortgages were deemed to be AAA rated by the rating agencies. The subprime mortgage securities differed in an important way from those based on prime conforming mortgages. For prime conforming mortgage-backed securities, the degree of credit protection for the AAA investors is fixed in advance. In contrast, for subprime mortgage-backed securities, the degree of credit protection for AAA investors started out “thin” and built up over the initial couple of years so long as mortgages did not default early in their life. 9 At the peak of the housing boom, not only was leverage high for the individual subprime borrower, but leverage was high for the investors in lower rated subprime mortgage securities. 10 This dynamic buildup of credit protection worked well so long as house prices kept increasing, but proved to be disastrous for investors in AAA subprime securities when house prices began to decline. The AAA rated subprime securities were then used as collateral against repurchase agreements. Given how safe the assets were thought to be, very small haircuts were required for these loans. In addition, the composition of repo loan terms shifted toward  8  Andrew Haughwout, Richard Peach and Joseph Tracy. 2008. “Juvenile Delinquent Mortgages: Bad Credit or Bad Economy?” Journal of Urban Economics 64 (September): 246–257. 9  Gary Gorton. “The Panic of 2007”.
2  BIS central bankers’ speeches  •  We have world-class universities such as INSEAD and University of Chicago based here, who will collaborate with this Campus to design programmes to offer highquality, specialised courses in banking and finance. •  We have research centres such as the Centre for Asset Management Research and Investments and EDHEC conducting specialised research in areas relevant to the financial industry. •  We have training providers such as the Wealth Management Institute and Risk Management Institute organising programmes and conferences to further thought leadership in areas of finance. BNP Paribas’ Asia Pacific Campus is a welcome addition to Singapore’s ecosystem to build human capital in finance for the future. Conclusion This is an exciting time to be in the financial industry, notwithstanding the challenges it has gone through since the crisis. It is also an exciting time to be in Asia. But to seize the opportunities in Asian finance, we need a deep pool of highly skilled and trusted professionals. I thank BNP Paribas for growing with Singapore, and for being a strong partner with MAS in our efforts to develop talent and capabilities. I am confident your strong presence in Singapore will serve you well as you continue to extend your Asian footprint. BIS central bankers’ speeches  3

Figure 8 a) Employment (moving quarter/moving quarter change, thousands)  b) Compensation index (IR) (percent, annualized quarterly velocity, moving  150  12  100 50 0  Real IR  Nominal IR  160  8  140  6  120  4  100  60 40  -2  20  -4 21  22  Source: Central Bank of Chile based on INE data. IALI  80  0  -100  Sence (*)  180  10  2  -50  c) Labor demand (index, January 2021 = 100, moving 3-month average  0 02  07  12  17  Source: Central Bank of Chile based on INE data. 13  22  20  21  22  (*) Information from System of Employment Board Analysis and Sence Labor Observatory. The indexes were built with information downloaded from trabajando.com and laborum.cl with nationwide coverage. The number of ads corresponds to ads uploaded by firms. Latest data available is from 31 October. Sources: System of Employment Agency analysis, Sence Labor Observatory, and Central Bank of Chile.
Conclusion 17 Asia holds promise for the next phase of growth for ILS given the region’s growing needs, and Singapore can play an important role to facilitate this growth as an ILS domicile. Today’s conference will provide an important platform for the industry to discuss such developments in the ILS market, and explore the key to harnessing the potential in Asia. 1 Schroders: Spotlight on catastrophe bonds 2 Disasters could cost Asia-Pacific region $ billion per year by 2030, UN warns, UNESCAP, 2018 3 High CAT risks, low penetration in Asia – only two ways out, AIR, 2017  4/4  BIS central bankers' speeches

In particular, total capitalisation grew very markedly until reaching a peak of $ trillion in November 2021, three times higher than the previous all-time high of 2017. The market is dominated by traditional cryptoassets; indeed, bitcoin and ethereum account for more than two-thirds of total capitalisation. In Spain, their transaction volume on some estimates amounted to around € billion in 2021.10 Yet they are also much less mature than is generally believed, and still, in aggregated terms this market only represents around 1% of the global financial system. At the same time, we should not overlook the fact that this market is already bigger than the subprime mortgage market was in the run-up to the global financial crisis. And the fact that trading volumes for some of the most representative assets types (including bitcoin, ether and tether) came, occasionally, close to those of the New York Stock Exchange (somewhere in between 70% and 95%). In any event, their high volatility is striking, as borne out by a cumulative loss of value of close to 40% in recent months. These fluctuations are often greater than those of other financial instruments and can also reach much more extreme values. Some studies have flagged the highly changeable nature of the factors underpinning crypto-asset prices and how these factors can be difficult to anticipate given the immaturity of the market.11 This  9  See, for example, N. Daskalakis and P. Georgitseas (2020), “An Introduction to Cryptocurrencies: The Crypto Market Ecosystem”, Routledge, London.