samchain/econo-pairs-v1 huggingface dataset:
But past evidence suggests that any recovery in risk appetite might take time – more time than fundamentals would imply. All of these behavioural elements have come together in today’s financial markets – disaster myopia, intrinsic uncertainty and deep trauma. This may help explain why risk-takers have their foot poised on both brake and accelerator, why risk capital is in stop-start mode. That implies a risk of heavy and persistent financial congestion in the period ahead. With hindsight, Roosevelt’s fear (of fear) in 1933 was well-founded, economically and psychologically. It may also be being repeated. The role of macro-prudential policy As long as aversion to risk-taking is causing financial congestion, growth (like traffic) will remain sluggish. The public policy question, then, is whether anything can be done to allay the fear factor, speed the repair of balance sheets and stimulate risk-taking. Experience during the Great Depression taught us a great deal about the role of fiscal and monetary policy in these situations. Indeed, in many respects the Great Depression was the birthplace of activist monetary and fiscal policy, today’s conventional arms of macro-economic policy. For different reasons, however, these arms are at present close to fully stretched. In countering the fear factor, that begs the question of what else might be done? With fortuitous timing, there is a new tool in the box, a third arm of macro-economic policy. This is so-called macro-prudential policy. As its name implies, this policy tool is intended to meet macro ends using prudential means.

The UK has recently put in place an explicit macro-prudential regime. In July of last year, the UK government announced a new Financial Policy Committee (FPC) to execute macro-prudential policy.7 The FPC is housed in the Bank of England and met for the first time in June this year. The FPC’s objective is to protect and enhance the resilience of the UK financial system against risks including “unsustainable levels of leverage, debt or credit growth”. Therein lies a key FPC challenge. There is evidence of unsustainably high levels of leverage in some sectors. But elsewhere, there is evidence of credit growth being unsustainably low. Some companies remain over-leveraged. Yet others are suffering a credit shortage, with bank lending to companies continuing to contract over the past 12 months. 5  For example, Graham and Narasimhan (2004), Malmendier and Nagel (2011). 6  For example, Cogley and Sargent (2008), Barro (2006). 7  HM Treasury (2010). BIS central bankers’ speeches  5  In framing macro-prudential policy today, both these factors need to be weighed: on the one hand, enhancements to the risk-bearing capacity of the financial system to repair balance sheets; on the other, encouragement for the risk-taking capacity of the system to boost credit supply. These factors can sometimes point in subtly different directions. The first might point to higher buffers to boost banks’ risk-bearing capacity, while the second might point to lower buffers to boost their risk-taking capacity.
In 1999 the Riksbank formally received independence, with an Executive Board that makes monetary policy decisions and a statutory inflation target. The changeover in exchange rate and monetary policy and the Riksbank’s increased independence have been important conditions for bringing down inflation to a level that corresponds to other countries. This development has been supported by the budget consolidation and the wage formation reform. Sweden is now once again a low inflation economy, after cost crises and overheating. Over the past 10 years, inflation has varied between just below zero and just over three per cent on an annual rate and inflation expectations have stabilised at around 2 per cent a year. International inflation is also lower now. Both in the EU and the OECD area, inflation is close to 2 per cent a year. The major distinction from before is that the difference in inflation between Sweden and other countries has declined. We once again have an inflation rate comparable with that in Germany. Things also look better in other regards than they did in the 1970s and 1980s. During the 1960s and up to the mid-1970s, Sweden enjoyed high growth, with the exception of a few individual years. This was followed by a period up to the early 1990s when growth was lower and varied considerably. Some years it was even negative. Over the past ten years we have once again enjoyed good and relatively stable growth.

More recently, there has also been continuous innovation and an increasing number of issuances in foreign currency. As Malaysia offers international participation in our Islamic financial system, we offer to be an international gateway, particularly in strengthening the link between the two important dynamic growth regions of Asia and the Middle East. Malaysia will also continue to collaborate with other regulatory authorities to ensure financial stability in the Islamic financial system. This will be through our active involvement in the Islamic Financial Services Board (IFSB), the Islamic Financial Stability Forum (IFSF), the initiatives by the Islamic Development Bank (IDB), and finally in the newly formed International Islamic Liquidity Management Corporation (IILM). In the area of capacity building, Malaysia has also given priority to two areas: one is in human capital development and the second, in catalysing mutual recognition of Shariah  BIS Review 141/2010  1  interpretations. The International Centre of Education in Islamic finance (INCEIF) was established in 2006 for advanced education for practitioners in Islamic finance, and in 2008, the International Shariah Research Academy (ISRA) was established to conduct applied Shariah research on the contemporary Islamic finance issues and to provide a platform for active international engagement among Shariah scholars. Moving forward, Malaysia will continue its efforts in strengthening our international linkages in the global Islamic financial system through collaborative partnerships and cooperation with the objective of contributing towards greater international financial and economic integration. Let me conclude.
One consequence is that it will bring us closer to the insurance industry, which for the most part resisted the appeal of Canary Wharf and stayed close to the roots that date back to Barbon. He would have approved, providing he could have built, insured, and rebuilt your building. Time will tell whether you will welcome having your prudential regulator near to your doorsteps, and as far as we know located in the City for the first time. I want to tackle a number of large issues today, which are closely connected. First, why do we think it makes sense to place prudential supervision of insurance in the PRA alongside banks and major investment firms? Second, what style of supervision will the PRA adopt and how will it affect insurers? And third, how do we think about the issue of systemic risk, and systemically important status for insurers? There are over 700 insurers in this country which will be subject to prudential supervision by the PRA and conduct supervision by the FCA (in addition, insurance brokers will be entirely supervised by the FCA). Why place prudential supervision of insurers in the PRA alongside banks? I am tempted to make one point here and conclude, namely that we asked to have one industry that caused us less trouble than banks. Of course, that would be on the basis of  BIS central bankers’ speeches  1  “please keep it that way”.

There are elements of the Code that speak specifically to participants that act as clients: the ninth principle, for example, notes that clients should be aware of the risks associated with the transactions, and regularly analyse their execution. The Code also empowers buy side firms to ask the right questions of their trading counterparties, for example what type of market colour they can expect to receive, and the appropriate transparency that should be provided around execution practices. And from my perspective it is important that buy-side firms ask those questions, as your informed, engaged, participation is vital to market integrity. A second key constituency that needs to embrace the Code is the range of newer market participants that have become increasingly important in recent years. Most notable perhaps is the entrance of non-traditional market makers – particularly principal trading firms – who can play an integral role in mobilising liquidity across the fragmented array of venues. Newer entrants like these may not have been caught in the mire of conduct issues that galvanised the work on the Code in the first place, but their commitment would enhance the Code’s success. In turn the Code’s success will be to their benefit: clearly defined expectations about good market practice level the playing field and are supportive of innovation. More generally, as the new entrants gain market share, they should recognise that increasing numbers of their counterparts are likely to expect them to demonstrate commitment to good conduct.
In the United States, however, the upward shift in productivity growth has led to a development along the lines I discussed earlier, with growing expectations of future profits and incomes, steeply rising share prices, extensive new issues and credit growth. Massive investment in the corporate sector has been accompanied by rapidly rising purchases of durable goods. The private sector’s financial balance has deteriorate rapidly and become increasingly negative. That in turn has enlarged the deficit on current account. In Sweden, the Stockholm Exchange has been driven by the stock-market boom in the United States, not least in the IT and telecom sectors, but credit growth has been more moderate. Neither has investment risen as rapidly as in the United States. The private sector financial balance has not undergone such a marked negative swing and for several years the current account has shown relatively large surpluses. So in crucial respects the course of events in Sweden in the second half of the 1990s differs from that in the United States. Against this background, in this period the Riksbank has not found any grounds for sizeable departures from the rule of action. 5. Conclusions  So what conclusions can be drawn about how monetary policy ought to react when the economy is exposed to different types of shock? I have discussed two types of shock: price effects from deregulations and an upward shift in productivity growth.

Urban Bäckström: What shall guide monetary policy? Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, to the Swedish Economics Association, Stockholm, 17 April 2001. *  *  *  Thank you for inviting me once again to the Swedish Economics Association to discuss various aspects of the Riksbank and monetary policy. I greatly appreciate the opportunity of addressing what can be called a historical and academic forum and conducting a dialogue about economic policy both with the two opponents and with other scholars and students. The inflation target has been monetary policy’s rudder ever since 1993 and I believe most people would agree that on the whole in this period it has functioned fairly well. After a couple of decades of high inflation, we have managed to re-establish price stability. Market players as well as people in general are now more confident in and have a better understanding of the regime and the general formation of monetary policy. It also looks as though the importance of fiscal discipline as a means of supporting the monetary policy regime is anchored in the political system and in Swedish society. Sweden is not the only country where a regime with an explicit inflation target seems to be working well.
It is a great pleasure for me to chair now the panel that will discuss some of key policy issues raised in the two reports presented to you earlier. We have the privilege of having four outstanding panellists with first hand experience in dealing with financial integration and stability at the highest level. Michel Barnier is since early this year European Commissioner for Internal Market and Services and before that he held various ministerial posts in French cabinets, including that of Minister of Foreign Affairs and of European Affairs. Jaime Caruana is since April last year General Manager of the Bank for International Settlements. Previously, he was counsellor to the Managing Director and Director of the Monetary and Capital Market Department of the IMF. Jaime was also Governor of the Bank of Spain, and in that capacity he served on the ECB’s Governing Council. Vikram Pandit is since end 2007 CEO of Citigroup, a truly global financial player which has a history of being present in more than 100 countries worldwide. He took the helm of Citi at a very difficult time, and since then has initiated a turnaround in the business model of the bank. Before that, Vikram had a long successful career in other financial institutions, including Morgan Stanley and Citi itself. Alessandro Profumo has been CEO of Unicredit Group since it was founded in 1997.

Jean-Claude Trichet: Financial integration, development and stability – lessons from the crisis (introductory remarks) Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the conference “Financial integration and stability: the legacy of the crisis”, sponsored and organised by the European Central Bank and the European Commission, Frankfurt am Main, 12 April 2010. *  *  *  Ladies and Gentlemen, I would like to welcome you to this conference on financial integration and stability, jointly organised by the ECB and the European Commission. I would like to thank in particular Commissioner Barnier for participating in this event, and his services for the smooth coorganisation of it. This joint conference is an illustration of the very good cooperation that exists since a long time between the two institutions. The European Commission is in the driving seat on all what concerns financial integration. The ECB also a strong interest in this topic, because of the implications for the single monetary policy, our primary mandate, and also on financial stability and the operation of payment systems, areas where we have a statutory responsibility. The very good cooperation between our institutions has intensified in the wake of the financial crisis. Let me just mention the recommendations and guidance we developed in the course of last year on support measures for banks in difficulties. This joint work limited the risk of unilateral and uncoordinated support measures by governments and was therefore crucial in maintaining a level playing field and in preserving the Single Market.
Short-term interest rates Per cent  8  8 US  6  6 Euro area  4 2  4 2  0 1999  2000  2001  2002  2003  0 2004  Source: Norges Bank  The international upturn came to a halt in 2000. The bubbles in the equity markets burst. Many years of high investment and rising unemployment led to excess capacity. The terrorist attacks on 11 September 2001 put a new damper on economic activity. From the summer of 2002 to the spring of 2003, a highly extraordinary accumulation of negative events in the global community - accounting scandals, fear of terror, war and disease - put a brake on growth. US interest rates, which were sharply reduced at the beginning of the downturn, have subsequently been reduced further. Interest rates have also remained low in the euro area. There are now clear signs that the global economy has passed the trough. However, while the outlook is brighter, price inflation is still low and interest rates are being kept unusually low. Economic growth is high again in the US. Employment is rising, but there is still excess production capacity and very low  10  BIS Review 11/2004  inflation. It may take some time before interest rates are increased substantially in the US. Growth in Asia is solid, but a global rise in interest rates is unlikely to start there.

The expansion of money has been sustained by the increased demand of the public sector for funds at end-2011, as well as the stable contribution of the demand by the private sector. The latter continues to reflect developments in the real economy, being conditioned mainly by weak demand for loans by businesses and households. In December, the loan portfolio of the banking system to the private sector was 10.4% higher than a year earlier. Similar to the most part of 2011, it has reflected the demand of the private sector to fund its liquidity, consumption and investment needs, materialising also the hesitation of the private sector to commit to long-term projects. In addition to demand factors, the supply of loans is assessed to have been more tightened in the second half of 2011, reflecting the added prudence of the banking system in lending. Latest developments in financial markets are influenced by the normal and quiet performance of demand and supply, which is in line with the monetary policy signals. The key interest rate cut to 4.50% is reflected in eased borrowing costs for banks, while it is expected to be completely transmitted to other higher-maturity market segments. Overall, risk, liquidity and inflation premiums in financial markets remain contained. Projections for the expected performance of the economy support the assessment for positive, though below potential, growth of the Albanian economy for the year ahead. Foreign demand is expected to continue to provide positive, but more moderate, contribution to aggregate demand increase.
BIS Review 84/2007  3  These factors, more than other differences in tax, accounting, or legal regulatory regimes, account for the bulk of the declines' share of equity and debt raised in the United States by companies around the world. And this shift is something that we benefit from, not just in the direct sense that U.S. financial institutions play an important role in those markets, but in the broader sense that we will gain from the improvements in economic growth that come from financial market development around the world. But in this context, we need to be more attentive to the risk that specific aspects of our system, regulations or other constraints, create a greater disincentive to locate a financial business here, or to invest here, or to raise capital here, than would have been the case five or ten years ago. We need to take a careful look at how we regulate financial activity in a world where capital is more mobile, and the structure of the financial system has diverged substantially from the system for which our regulatory framework was designed. That does not mean we should contemplate weaker regulation or lower standards. The strength of the U.S. system is in part the result of the confidence we have developed in the integrity and resilience of our markets, in part by establishing strong standards for investor protection, market practices, and safety and soundness. Sustaining this confidence will be critical to the future strength of our financial system.

They contain Braille markings as well as tactile symbols to denote each denomination. In 2000, Bank Negara Malaysia presented 13,000 units of Ringgit cash test cards to the visually impaired which measured third series banknotes of all denominations. This year, the Bank will distribute 20,000 units of Ringgit cash test cards to the visually impaired. The Bank has made several improvements to the new cash test card design including to measure the fourth series banknotes and a coin channel to measure third series coins after obtaining feedback from the National Council for the Blind, the Malaysian Association for the Blind and Kementerian Pembangunan Wanita, Keluarga dan Masyarakat. In conjunction with this program, I would like to take this opportunity to launch the new cash test card. BIS central bankers’ speeches  5
In China, for example, the service sector has grown to more than half of GDP in 2015, much of it driven by a surge in e-commerce and the expansion in logistical services required to support it. Moreover, as the cost of digital technology declines, a wider range of services are becoming more tradable including design, marketing, business processes, and education. Thus not only has the service sector 3  become more important within a country, the share of international trade in services has also increased markedly. The third, and perhaps most unsettling transitional force, is the ultra-accommodative monetary policy stance adopted by major advanced economies. What started out as extraordinary responses to a precipitous crisis, unconventional monetary policy measures have not only been maintained, but in many cases have been applied more intensively with ever greater degree of experimentation and radicalism. It is striking that after all this time, the crisis mentality among policy circles has yet to fully abate. The agglomeration of these transitional forces has had profound impacts on economies the world over. Together, the slowdown in world trade and the shift to services have underpinned important changes in inflation and growth dynamics. In terms of inflation, globalization has for many years increased the importance of foreign factors in price dynamics. Persistently low and more synchronized inflation is partly attributable to the effects of rising competitive pressures in world markets as well as common forces such as falling energy prices. As global trade adjusts, the influence of external factors has regained prominence.

As is well known, the long lags of policy creates a need for central banks to “take the punch bowl away when the party gets going”. Given the longer duration of financial cycles, the need to act well before the risks become obvious may mean that central banks will have to “take the punch bowl away even before the party gets started”. But that is a political economy challenge that needs to be resolved and managed through careful redesign of central bank mandates. Heed must be paid also to institutional arrangements, especially for central banks where the financial supervision authority lies with another body as coordination will be harder. This will take time. But the risks to financial stability is immediate. In the interim, central banks may need to interpret their mandates more flexibly and avoid overly narrow and zealous interpretations of price stability. Inflation targets need to be implemented flexibly and over longer horizons. All the while explaining clearly and consistently the logic of policy. In doing so, it should be stressed that fundamentally, macroeconomic and financial stability are two sides of the same coin. Macroeconomic trajectories cannot be sustainable 9  if the financial sphere is out of equilibrium. And the avoidance of financial boom-bust cycles leads to better economic outcomes over the long run. The perceived trade-off between growth, inflation, and financial stability, therefore, is to a large extent an artifact of the short horizon focus of policy.