samchain/econo-pairs-v1 huggingface dataset:
We want to  MSME sector development and  emphasise that all our policy measures  employment generation has been  are in line with the current policy stance  designed jointly by the Central Bank  to promote the competitive advantages  and the Ministry of National Policies  of Sri Lanka in global business activities  and Economic Affairs. It constitutes a  resulting in the enhancement of investor  government-led support mechanism  confidence, strengthening of foreign  to address financial, technical,  reserves and stabilising the foreign  marketing and entrepreneurship  exchange market. needs, especially of youth and young  The government has identified that it is timely to have a new Foreign Exchange Act. As proposed in the Budget 2017, the new Foreign Exchange bill will be presented to the Parliament during 2017.  graduates, women and differently abled people. The unique feature of this Scheme is the inclusion of a special grant element for start-up enterprises to meet the initial expenses. The maximum amount of  In addition, the Central bank is in the  the grant will be Rs. 50,000 and the  process of further relaxing foreign  maximum loan amount of  exchange transactions. Rs. 250,000 will be given at an interest of 5.5 per cent per annum. Regional Development: The Central  The Scheme intends to allocate  Bank, as the agent of the Government of  Rs.

08.07.2019  The Banco de España and its promotion of economic history research Presentation of the “Guide to Historical Banking Archives in Spain” Pablo Hernández de Cos Governor  Good morning, ladies and gentlemen. It is a pleasure for me to close this conference, which has presented the “Guide to Historical Banking Archives in Spain”. This publication, both for the quality of its information and the wealth of data it contains, will no doubt contribute to increasing knowledge on the historical development of the Spanish banking system. I would like to thank all those who have participated in this project for their efforts. My gratitude in particular to the academic historian, Pedro Tedde, to Professor María del Carmen Angulo, and to all those institutions and individuals who have enthusiastically collaborated in the publication of the guides to their respective archives. And naturally, too, to the Banco de España teams behind this initiative. The value of the initiative lies in the very value of the Spanish banking and Banco de España archive collections. These archives are fundamental to the study of our history and the development of Spain’s banking system. In this respect, I wish to highlight the importance of having historical archives that allow documents to be held and conserved and that guarantee their traceability and integrity. Without these archives, our knowledge of the past would no doubt be limited. Indeed, their subject matter provides for well-founded historical analysis and for a better understanding of the reasons that led to specific financial decisions.
Nonetheless, regardless of the form of institutional organisation, it seems inevitable that monetary policy and regulatory activities will increasingly approach each other. Can monetary policy prevent a credit-driven property boom? One issue that has been discussed for a fairly lengthy period of time, and which has gained fresh impetus from the financial crisis, concerns the extent towards which monetary policy should be used to attempt to counteract a rapid increase of property prices and credit  12  BIS Review 68/2010  volumes. This focus on the property market in particular exists because problems there often have greater effects on the financial system and the economy in general than problems on, for example, the stock market. Allow me to use the property market as an illustration here too. The dynamic of a creditdriven increase on the property market can be described as follows. When the price of an asset starts to rise, it becomes possible to borrow against that asset for a higher amount. This frees up money to buy more of the asset, but also for consumption. The latter implies that rising property prices may lead to a credit-driven consumption boom. When the price increases, there also arises a tendency to regard the asset as being less risky, meaning that the credit risk premium decreases and the loan-to-value ratio is allowed to increase. In the lending rate equation, this implies a decrease in the interest rate margin. Cheaper credit feeds further price increases, which, in turn, feed further credit expansion, and so on.

It should be pointed out that the reason that a central bank may wish to lean against the wind does not have to be because it only wishes to safeguard financial stability. That may be the case, but it may also be a purely monetary policy decision. The bank may simply wish to attempt to avoid severe fluctuations in the real economy and inflation, even if these are not deemed to be associated with financial stability problems. Leaning against the wind is not a problem-free strategy. Three primary counterarguments have been put forth. 7 Firstly, the imbalance must be identified at a sufficiently early stage. Attempting to rectify the imbalance too late may be problematic as monetary policy acts with a time lag. If property prices fall steeply immediately following an increase of the policy rate by the central bank, the delayed effects of the interest rate increase will reinforce the negative effects on the economy of the falling property prices. Of course, one must also be sufficiently certain that an imbalance really is building up. If the upturn is being caused by fundamental factors, a higher interest rate would hinder growth unnecessarily. Secondly, one has to rely upon being able to deal with the property price increase through reasonable increases of the policy rate. One hypothesis is that the optimistic mood often prevailing during a boom in the property market means that significant increases of the policy rate are required to have an effect.
Such an exercise is essentially identical to the common practice of constructing Taylor rules for monetary policy, as in Chart 2. Chart 4 draws the macro-prudential policy-implied path of US bank capital ratios. In deference to the architect of modern theories of credit-induced instability, let us call this the “Minsky rule” [Minsky, 1986]. The path of the Minsky rule is, in many respects, the mirrorimage of the Taylor rule. It suggests that hypothetical US banks’ capital ratios would have been systemically and significantly tighter than their actual path between 2000 and 2009. In  2  BIS central bankers’ speeches  other words, a tight macro-prudential stance would have counteracted the effects of a loose monetary policy stance. Although it is impossible to know for certain, it seems plausible that having this extra degree of policy freedom would have helped stabilise the US economy and financial system. A tighter bank capital regime would have tended to slow pre-crisis credit growth, thus constraining the boom. And more capital in the US banking system would have helped protect the wider economy from the credit crunch that followed the bust. In short, the boombust cycles in US credit and GDP would have plausibly been somewhat less severe had US policy been ambidextrous. The euro-zone crisis As a second historical example, consider the behaviour of some euro-zone crisis countries. In the run-up to monetary union, monetary policy was loosened significantly in a number of the peripheral European countries whose interest rates converged on core euro-area countries.

While a small step for mankind, this is a giant one for bank regulators. It is also, inevitably, something of a step into the unknown. What will be the impact of changes to the CCB on credit and growth? Will the two arms of policy (monetary and macroprudential) be better than one? And, if so, what institutional arrangements best deliver those benefits? Policy experience from the recent past and the present can shed light on these questions. The US dotcom bubble As a first case study, consider the behaviour of the US economy after the bursting of the dotcom bubble in 2001. Chart 2 plots US official interest rates in the period just before and after this event. Interest rates fell sharply, from 6.5% at the beginning of 2001 to 1% by the middle of 2003, to cushion the effects of the financial headwinds created by the dotcom bubble popping. Consider now what interest rate path would have been predicted had policy been responding mechanically to deviations of inflation from target and output from potential – in other words, following a standard “Taylor rule” [Taylor, 1993]. As Chart 2 shows, this would have implied a less dramatic fall in interest rates in the US. After the dotcom crash, a gap opened up between actual and Taylor-rule implied US interest rates. This was both sizable (on average, one or two percentage points) and persistent (lasting from early 2001 right up until summer 2008).
The natural question here is: what was the ingredient that led the financial events of midSeptember of last year to end up the way they did? The developed world entered a severe recession, and output dropped simultaneously in most countries. The crisis spread around the world like a virus, with unprecedented and, of course, unforeseen strength and speed, making no distinctions among economies’ strengths or weaknesses (Figure 1). What happened? Why was there no differentiation? How could such massive contagion occur? Why the synchrony? All of these are very important questions in understanding how the crisis was transmitted and how we will make it through. If there is one thing that is difficult to explain it is the intensity of its impact. In Chile, neither the path that the domestic economic cycle was experiencing nor the analysis of traditional transmission channels for an external crisis – that is, financial and commercial channels – are capable of fully explaining what happened (De Gregorio, 2009). The hypothesis that seems to have most ground at the moment is that a deterioration in global confidence, understood as a worsening of expectations and increased uncertainty around the world, has amplified the response to the initial impact, pushing us into a more acute and synchronized crisis than we could envision at first. It helps to study the historical relationships among the data if cycles and patterns tend to repeat themselves on a regular basis.

Figure 14  Change in growth projections for 2009 and 2010 (month-on-month variation of median projection, percentage points) 2009  2010  0.5  0.5  0.5  0.5  0.0  0.0  0.0  0.0  -0.5  -0.5 -0.5  -0.5  -1.0  -1.0 -1.0  -1.0  -1.5  -1.5 -1.5  -1.5  -2.0  -2.0 -2.0  -2.0  -2.5  Feb.08  Jul.08  Dec.08  -2.5 -2.5  May.09  Feb.09  Mar.09  Apr.09  -2.5  May.09  United States  Japan  Eurozone  Latin America  Chile  Mexico  Brazil  Eastern Europe  Source: Consensus Forecasts. 14  BIS Review 76/2009
After adjusting for unconventional policy there’s greater monetary policy divergence than implied by a simple eyeballing of the currently highly synchronised global rates cycle. And there remains the prospect of a further widening. In other words, domestic economic conditions – conditions affected by domestic monetary policy – still very much matter. None of this diminishes the considerable challenges of returning inflation to target in the face of global developments. There are profound secular and cyclical disinflationary forces at work in the global economy, and for economies like the UK their impact is being reinforced by exchange rate movements which will drag inflation down further at the policy horizon. Moreover, as events of the past few weeks have reminded us, a variety of global factors can affect global financial conditions and influence the neutral rate of interest. Central banks must take these Disparate Confounding Dynamics (DCDs) into account when setting policy. 2 Even for those economies with the strongest recoveries and the best functioning financial systems, they mean that the policy rates consistent with returning inflation to target will likely need to rise in a gradual fashion and to a limited extent despite robust domestic demand and firming domestic costs. For the UK at least, global DCDs influence but do not dictate policy. 1  Subramanian, A and Kessler, M (2013), “The hyperglobalization of trade and its future”, Global Citizen Foundation working paper 3, June.

“The Credit Rating Crisis”, NBER Working Paper, 15045. Freixas X., Parigi B. and J. Rochet (2000). “Systemic Risk, Inter-Bank Realtions and Liquidity Provision by the Central Bank”, Journal of Money and Credit Banking, 32(2). BIS Review 97/2009  3  Morgan D. (2002). “Rating Banks: Risk and Uncertainty in an opaque Industry”, American Economic Review, 92(4). Rochet J. (2008). “Liquidity Regulation and the Lender of Last Resort”, Financial Stability Review, Banque de France, February. 4  BIS Review 97/2009
As long as the probability distribution is sufficiently far to the right – in other words – well within positive territory so that there is virtually no risk that the firm is insolvent, lenders will generally be willing to lend. So what happens in a financial crisis? First, the probability distribution shifts to the left as the financial environment deteriorates and the financial firm takes losses that deplete its capital. Second, and even more importantly, the dispersion of the probability distribution widens – lenders become more uncertain about the value of the firm. These two phenomena are shown together in Figure 2. A lack of transparency in the underlying assets will exacerbate this increase in dispersion. As the degree of dispersion widens, a portion of the probability distribution falls into negative territory. This means that there is a real risk of loss for unsecured creditors if the firm were forced to liquidate its assets. Finally, in a crisis, unsecured lenders become more uncertain about others’ assessment of the probability distribution. For example, if creditor A believes the probability distribution  4  BIS Review 143/2009  looks like Figure 1, but at the same time is concerned that creditor B views the probability distribution as looking like Figure 2, creditor A may pull back. If there is a risk creditor B and others will not lend, the firm may not receive sufficient funding.

It is however a present concern to the extent that recent signs of increasing labour market shortages and decreasing FDI inflows question the capacity to maintain GDP growth at the high levels recorded in the past. Addressing these risks and challenges will require the conduct of prudent macroeconomic policies insuring short-term stabilisation, with fiscal authorities avoiding pro-cyclical loosening and generous spending policies, and monetary authorities preserving price stability and guaranteeing financial stability. However, macroeconomic policies alone are not sufficient to improve the long-term growth potential: they are aimed at fostering a stable and transparent business environment, but have to be supplemented by the implementation of structural policies designed to enhance labour market participation, labour mobility, competition in goods market, investment in education, R&D and infrastructure. It appears very clearly that the challenge of a stable and sustainable path for the catching-up process is closely interlinked with the challenge of a successful integration in the Euro area. For that purpose, it is in the interest of the New Member States themselves to be patient while accelerating structural reforms in order to meet both these challenges. Euro area accession will come in due course as the well deserved reward for the efforts of each country in creating the conditions of its own long-term economic prosperity. I look forward to such accessions. BIS Review 115/2007  5
In practice, access to information in most markets – including the credit market – usually differs between buyers and sellers. This is commonly referred to as information asymmetry and implies that the seller of a product knows more about it than the buyer does. A good example is the used car market. In the  6  BIS Review 153/2008  credit market it is commonly the borrower who knows more about his own situation than the lender does. One approach to dealing with this problem is to have a company’s creditworthiness assessed by an independent organisation. A credit rating can aid an investor because it would cost too much for the investor to analyse every company whose securities might be of interest. Moreover, market efficiency can be enhanced by businesses that are dependent on income from the market and therefore strive for a good reputation as providers of complete and correction information. Still, it is hard to ensure that the markets are liquid under every conceivable circumstance. If the participants suddenly become uncertain about asset values and if the counterparties are unfamiliar, a market can quickly become less liquid, which leads to high risk premiums. The current financial crisis has provided examples of this. Investors are averse to putting money into assets whose value is highly uncertain; they prefer the securities that are safest. Rather than doing business with unfamiliar counterparties, investors prefer counterparty risks that can be managed.

The Governing Council today also decided on further details of how the Eurosystem will buy assets with yields below the interest rate on the deposit facility under its public sector purchase programme. These decisions will be published in a separate press release at 15.30 CET. The monetary policy decisions taken in December 2016 have succeeded in preserving the very favourable financing conditions that are necessary to secure a sustained convergence of inflation rates towards levels below, but close to, 2% over the medium term. Borrowing conditions for firms and households continue to benefit from the pass-through of our measures. As expected, headline inflation has increased lately, largely owing to base effects in energy prices, but underlying inflation pressures remain subdued. The Governing Council will continue to look through changes in HICP inflation if judged to be transient and to have no implication for the medium-term outlook for price stability. A very substantial degree of monetary accommodation is needed for euro area inflation pressures to build up and support headline inflation in the medium term. If warranted to achieve its objective, the Governing Council will act by using all the instruments available within its mandate. In particular, if the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase our asset purchase programme in terms of size and/or duration. Let me now explain our assessment in greater detail, starting with the economic analysis.
But just as there is evidence that increased financial intermediation is often a Good Thing, so there is also evidence from numerous past credit/asset price boom-bust episodes that a juxtaposition of rapid credit expansion and sharp asset price increases is often a harbinger of a painful bust to come. So everything hinges on whether the underlying developments are sustainable or not. The mistake of (most of) the economics profession, along with many others, was a failure to see what was really going on beneath the surface and to understand how disruptively things could unwind. But, as I shall explain, I believe that the standard tools of economic analysis, far from being proved redundant, can shed useful light on what went wrong. Macroeconomic antecedents The proximate causes of the present crisis undoubtedly lie within the financial markets. But it is worth dwelling briefly on the macroeconomic environment in the years preceding the crisis, which was conducive to the formation of what proved to be an unsustainable credit bubble. BIS Review 101/2009  3  The Great Moderation To begin with, this period was characterised by an unusually high degree of macroeconomic stability, with steady growth and low and stable inflation in most of the advanced economies; see for instance Fig. 4, which shows performance in the G5 countries before and after 1992 2 . There are three broad explanations for this “Great Moderation”. First, it could just have been a happy accident, if this was a period characterised by unusually small, or a benign sequence of, shocks.

BIS Review 101/2009  9  Asset Relief Program (see Taylor, 2009), raised the possibility in investors’ minds of the failure of a whole range of institutions that had previously been considered safe. That is evidenced in the simultaneous sharp spike upwards in the CDS spreads of a number of financial institutions after the collapse of Lehman’s (see Fig. 12). Moreover, the prospect of having to make significant default pay outs called into question the solvency of a key provider of that insurance, AIG. The bottom line of all this is that the information requirements for managing risk escalated rapidly at the same time as investors were waking up to the realisation that the distribution of prospective returns on a range of asset-backed securities was a great deal worse than they thought. Not surprisingly, there was a rush for the exits and a drying up of wholesale funding to institutions that were thought to be at all vulnerable. Moreover, attempts to cope with that by selling off assets ran into an adverse selection problem: if someone is selling an asset, then perhaps that indicates that they know it’s a “lemon”. And even the revelation of central bank support in its role as Lender of Last Resort, far from solving the problem, could be interpreted as a negative signal about an institution, as was so in the case of Northern Rock, for example.