samchain/econo-pairs-v1 huggingface dataset:
The next step in the process is likely to be the issuance by the SFC of a consultative paper. Another area which we are looking at is taxation. We acknowledge that there are serious anomalies in the current arrangements for taxing interest income in Hong Kong but, given the uniqueness of Hong Kong’s overall tax structure, and the conflicting aims of retaining international competitiveness on the one hand and preserving fiscal revenue on the other, there is no very easy solution. What we are doing is to sponsor, under the auspices of the Hong Kong Institute for Monetary Research, a fundamental study of the taxation of financial intermediation in Hong Kong. This study will hopefully further inform the debate on this tricky subject. I would not at this stage wish to guess as to the direction in which our advice will eventually point. BIS Review 57/2000  2  We are also overseeing the development of a US dollar payment clearing system for Hong Kong, which will provide an enhanced framework within which the market in US dollar debt securities could develop if issuers and investors so wished. There are also two initiatives on which we are actively engaged in collaboration with others in the region, though each is still very much in its early stages. One is the question of a possibly wider role for credit rating agencies.

Thus, although overall private sector issuance may increase as a means of closing the sector’s financing gap, there is some evidence - perhaps not conclusive - that this may be at the cost of some hardening of yields relative to government yields, at least for lesser names. Of course, in some cases the increase in yields may just be the more straightforward consequence of a rising level of corporate gearing. There are also indications that increased debt market activity may have been more evident in the floating rate sector than for longer-dated fixed rate issues, where it may have been difficult to establish appropriate new benchmarks. Thus, although crowding-in may be occurring, the process is more complex than the simple like-for-like substitution of corporate for government paper. Another consideration for certain investors is that they increasingly have to accept that a strategy based simply on purchasing the paper of top-rated issuers such as governments or multinational organisations may no longer be feasible or economic. Yet, if they are going to embrace lesser-rated paper in their portfolios, they may need to shift their approach towards a somewhat more sophisticated 1  BIS Review 57/2000  portfolio strategy, which permits the holding of lower-rated paper at prices which appropriately reflect the risks, with the risks balanced across the whole portfolio. This may necessitate changes in the ways in which fund managers are instructed to address their task and in the tools which they need to perform it.
And the kind of asset purchased is a third variable. UK QE purchases have mostly been concentrated on the gilt market, as well as much smaller quantities of sterling corporate bond purchases. But during the financial crisis the APF also purchased  Perhaps the closest thing to a policy makers’ manual is the CGFS report referenced in footnote 2. On the operational side a detailed guide to the Bank of England’s own facilities is available at https://www.bankofengland.co.uk/markets/bank-of-england-marketoperations-guide. 6 I have not covered funding or lending schemes in detail today. But it is worth noting that the TFSME, which was designed to help reinforce the transmission of the reduction in Bank Rate as well as incentivise banks to provide credit particularly to SMEs, continues to expand in size; current usage at £ and is expected to exceed £ 7 See for instance “QE: the story so far”, available at https://www.bankofengland.co.uk/working-paper/2016/qe-the-story-so-far. 8 Buying index linked gilts could potentially create the wrong incentives for the MPC in delivering on our remit. It could also crowd out a key tool for managing inflation risk which is already subject to significant private sector demand, and is often highly illiquid as a result. 9 This number is greater than the approximately £ of gilts purchased to date because some of the gilts in the portfolio have increased in market value since being purchased. 10 Buying short maturity gilts would have a reduced duration impact and would require more frequent reinvestment; it could potentially also distort market expectations of policy rates.

In the structural aspect, we welcome reforms and initiatives that contribute to the country’s growth potential, through developing infrastructure, improving the legal framework, enhancing productivity and competitiveness of the Albanian economy, attracting foreign investments and maintaining and improving macroeconomic stability at home. The Bank of Albania is fully committed and engaged in the latter. Our key focus will continue to be: maintaining price stability and establishing pre-requisites to step-up financial stability. Therefore, we are convinced that we are providing a valuable service to long-term economic growth and welfare. 2  BIS central bankers’ speeches
This is because average unemployment is independent of monetary policy and the inflation rate. This is in turn because inflation expectations are assumed to adapt to actual inflation. The long-term Phillips curve, which illustrates the relationship between average inflation and average unemployment, then becomes vertical, and average unemployment thus becomes independent of the average inflation rate. In Sweden, however, inflation expectations as measured according to TNS Sifo Prospera’s survey have stabilised around 2 per cent, despite the average inflation rate being lower. This is illustrated in Figure 2, which shows the five-year average of expectations one and two years ahead for all of those interviewed from 1996. The Riksbank has thus succeeded in anchoring inflation expectations around 2 per cent, despite actual inflation being lower on average. That inflation expectations are anchored to the target is good, and makes it possible for the Riksbank to better stabilise unemployment without inflation fluctuating too much. 14  PCE stands for personal consumption expenditure. 15  CPIX/CPIF refers to CPIX inflation up to the end of the first quarter of 2008 ad CPIF inflation from the start of the second quarter of 2008. The CPIX excludes the effects of indirect taxes, subsidies and mortgage costs from the CPI. The CPIF excludes the direct effects on the CPI of changes in mortgage rates. The average CPIX/CPIF inflation is 0.4 percentage points lower than the target when measured using real-time data for the period 1997–2011.

There is thus hardly any support for low interest rates in themselves causing problems for financial stability or for high interest rates in themselves improving financial stability. 9 The current situation in Sweden is rather that higher policy rates may have a negative effect on financial stability. Swedish banks are now choosing to fund themselves by short-term borrowing in foreign currencies, which is cheaper than borrowing in Sweden as interest rates are higher here than abroad. But this entails some risks as foreign investors are an unstable source of funding (Sveriges Riksbank 2012a). When the policy rate in Sweden is raised in relation to interest rates abroad, it becomes even more attractive for the banks to borrow in  9  Is the United States an exception? Hardly. A very fragile financial sector arose there without resilience, as a result of a lack of regulation, exaggerated confidence in risk management, very excessive leverage, gigantic hidden off-balance sheet liabilities and large information problems with a large spread of uncertain assets. A modest shock in the form of loan losses due to untenable sub-prime mortgages with low-quality credit assessments then led to a major financial crisis. It was not low interest rates that led to this lack of resilience and to these untenable sub-prime loans, and it is difficult to see that higher interest rates would have prevented the crisis. 8  BIS central bankers’ speeches  foreign currency.
Further, under this Act the CNB has at its disposal practically all the tools known to advanced market economies. BIS Review 25/1997  -6-  At the beginning of the transformation process, the main tools of monetary policy were, quite naturally, direct ones. Credit limits, interest rate ceilings expressed as maximum deviations from the discount rate and refinancing loans (in 1991 represented for small, new banks on the average 60 per cent of total sources but for big banks 5-10 per cent only) were used. Credit and interest rate ceilings were abolished in 1992 which can be regarded as a transition year towards indirect control of monetary developments. After credit ceilings on the minor banks were removed in April 1992 and on the major banks in October, central bank control of monetary developments was effected through discount rates, minimum reserve requirements, auction refinancing credits and central bank bills. My predecessors behind this chair, the governors of the central banks from Germany and Switzerland, underlined the role of money supply targets in the kit of tools. In this respect the Czechoslovak and the Czech practice can enrich the experience. Since 1990 the intermediate targets have been set in the form of planned changes in credits or money. For 1990 the target was “to keep the development of credits in total within the scope of -2 per cent to +1 per cent related to the level at the end of 1989”.

The EEA Agreement is basically a mechanism through which EFTA countries like Iceland and Norway were allowed to participate in the EU single market, which includes free movement of capital and provision of financial services. The underlying principles are those of home licensing for operation anywhere in the area and of a level playing field for competition, where size and location are not supposed to matter. It therefore goes against the underlying principles of this framework to consider the size of banks relative to GDP as a metric for concern, as is now so rightly in fashion. This so-called European “Passport” enabled the Icelandic banks to operate throughout the EEA, including through branches in other EEA countries. We now know that there are deep flaws in this framework and that these flaws are important elements in the current euro area crisis. A key issue here is the contradiction between the European Passport rights, on the one hand, and national supervision, national deposit insurance, and national crisis management and resolution regimes, on the other. This is what recent proposals of a banking union are supposed to address. All of these problems are much aggravated when different currencies come into play, and for EEA countries and EU countries outside the euro area, this framework also has embedded in it a potentially huge foreign currency liquidity risk in the banking system that is not covered by a LOLR.
I am confident that the ECB is well equipped to cope with this challenge, not least due to the "full information approach" chosen in the form of the two-pillar-strategy. Of course, not only central bankers face uncertainty, but also private agents. Given this situation, the central bank itself must be an even greater source of stability. It must not only avoid any actions which may bring uncertainty to the economy, but must try to stabilise the expectations of private agents. When private agents are uncertain about the objective and the commitment of the central bank to this objective, they tend to shorten their planning horizons. They therefore become less predictable, which ultimately leads to a less foreseeable economic environment. BIS Review 10/2001  3  Thus, it is crucial for a central bank to define its policy objective and its strategy clearly and to provide a stable and broadly predictable pattern of behaviour to the public. In addition, central banks should avoid pursuing an activist monetary policy, i.e. they should avoid attempts to fine-tune the economy. In general, the limited knowledge of the monetary transmission process favours a clear medium-term orientation in order to accurately assess the risks to price stability. The current monetary and economic situation in the euro area Let me finally turn to the current monetary and economic situation and its implications for monetary policy. As you are no doubt aware, the ECB has kept interest rates unchanged since the beginning of October last year.

Furthermore, over the first two years of Monetary Union, there has come to be greater understanding that this is indeed a sensible approach. 2  BIS Review 10/2001  Monetary policy in an environment of structural change Central banking entails, by definition, acting under uncertainty. While this statement holds true in general, it is particularly the case for the ECB. The introduction of the euro had the potential to trigger structural changes in financial, goods and labour markets, which are in part already visible today and may evolve further in the near future. With regard to financial markets, the integration of national money markets into one area-wide money market has been almost without friction since the very start of Stage Three, which has allowed for an efficient implementation of monetary policy decisions. In the other segments of the financial markets, considerable progress has been made, although the integration process is far from complete. The removal of barriers to exchange rate risk between the countries of the euro area helped to facilitate the standardisation of debt instruments and widen the range of investment opportunities. Portfolio allocation strategies within the euro area are now mainly oriented towards a sectoral selection and, to a lesser extent, a national selection of assets. That is an impressive indication of the ongoing integration of financial markets in the euro area. This trend, in turn, enhances the liquidity of markets and affects the financing decisions taken by companies.
In the fiscal policy domain, the elements of a good rule are: It is clear and easy to understand; it is binding, i.e. has a basis in law – ideally at the constitutional level; and it is equipped with a specific sanctioning mechanism. Finally, it must make provision for exceptions, and these should be clearly defined. In the monetary policy domain, too, there are certain requirements regarding what makes a good rule. First, it must set out how the central bank should use its policy tools to achieve the goal of price stability. It defines criteria according to which monetary policy measures are taken. For many central banks, inflation forecasts play an important role. On the one hand, they serve as the main indicator for the interest rate decision. On the other, they are an important communication tool. A good rule creates a certain degree of transparency vis-à-vis the public, and makes monetary policy more predictable. It provides an anchor for inflation expectations and helps to improve the credibility of monetary policy. Second, we need a culture of stability which is well anchored in the minds of both politicians and the general public – part of the national mentality (cf. chart 6). Economic literature has repeatedly demonstrated that certain political structures and a culture of stability are mutually reinforcing. 7 For fiscal policy, these structures can be, for example, fiscal federalism (tax competition), the subsidiarity principle, direct democracy structures and political continuity (e.g. the concordance principle).

6 To achieve a balanced budget, it is necessary to limit the room for manoeuvre in the political domain. To this end, politicians use fiscal rules as a form of self-imposed restraint (cf. chart 5). As a result, automatic stabilisers now play an increasingly important role compared to discretionary measures. The automatic stabilisers are designed to fulfil the three T-criteria. Unemployment insurance is an important automatic stabiliser. It triggers automatic government expenditure or receipts, depending on the economic situation, and thus has an immediate, or timely effect. Second, it provides targeted support to those affected by the economic downswing. Third, it is temporary. But rules alone are no guarantee of stability, for there is often considerable room for interpretation when implementing them. There is always a way to circumvent them. Fiscal rules existed in a number of countries even before the onset of the sovereign debt crisis. A good example is the Maastricht criteria in the EU, which various countries repeatedly failed to meet, without effective sanctions being brought to bear. The history of monetary policy is also rich with examples, from all over the world, which show how a departure from the objective of price stability can have drastic consequences for the economy. If the central bank is unable to ensure price stability, it calls its credibility into question, and thereby runs the risk of reducing the effectiveness of future measures. What factors help to ensure that rules are complied with? First, we need good rules.
Indeed, estimates from both the International Monetary Fund and various investment banks suggest that the current value of Thai baht is consistent with the underlying fundamentals. To promote a deeper foreign exchange market and foster more balanced capital flows, the Bank of Thailand also launched a Capital Account Liberalization Master Plan, which entailed liberalization of Thai investment abroad and a streamline of foreign exchange regulations. There are also continuing efforts to enhance the private sectors’ adaptability and foreign exchange risk management. These initiatives should provide an extra layer of cushion to shield businesses against short-term market volatility. They are not, however, a substitute for structural improvement in productivity, which in the long run holds the key to success for the export industry. Given that the global environment is still subject to uncertainty, capital flows may continue to be volatile, and risks to financial stability warrant close monitoring, it is more important than ever that monetary policy strikes the right balance between providing support to sustain growth momentum while ensuring long-term financial stability. In the judgment of MPC, the current stance of monetary policy remains accommodative, with the real policy rate still in negative territory. As the balance of risks shifts between the need to support growth and the duty to safeguard financial and price stability, monetary policy stance will have to be adjusted accordingly. The Bank of Thailand stands ready to employ the right mix of policy tools under its purview to attain these goals.

At end-2008, the largest ownership interests were in British Mondi (8.7 per cent), Australian Babcock & Brown Infrastructure Group (7.8 per cent) and Finnish UPM-Kymmene (5.8 per cent). In bond markets, the largest issuers are sovereign states. The Fund will therefore normally have large holdings of government debt. The Fund’s average share of market capitalisation in fixed income markets at the end of 2008 was around ½ per cent. The Fund has a longer investment horizon than the vast majority of other market participants. The important question is therefore how sound today’s investments prove to be in the long term. The government now owns a fair share of the global business sector. This represents real value that will provide a return reflecting both global economic growth and the risk related to fluctuations in equity prices. Active ownership Active ownership has also become an important part of Norges Bank’s investment operations. The purpose is to help safeguard financial wealth for future generations by promoting good corporate governance and encouraging high ethical, social and environmental standards at investee companies. As a shareholder in almost 7 900 companies, Norges Bank has both rights and obligations in relation to these companies. Our long time horizon exposes us to developments in markets traditionally of less concern to more short-term investors. We use our position as a shareholder to address topics relating to traditional shareholder rights, such as the right to equal treatment and influence.
This seminar will be a useful platform for constructive dialogues among the financial industry, infrastructure-related business sectors, and AIIB, to exchange views on the latest infrastructural development trends, and how we can harness the opportunities arising from the establishment and projects under AIIB. I shall now hand over the time to President Jin for his most anticipated speech. Thank you. 2/2  BIS central bankers' speeches

I wish ING Public Takaful Ehsan every success in its endeavors and look forward to its meaningful contribution in driving the takaful industry and Islamic finance in Malaysia forward. BIS central bankers’ speeches  3
Instead I want to discuss how to approach some of the challenging issues faced by many central banks as we seek to decide how best to organise our work and to allocate resources in order to promote financial stability. We need to be clear, accountable and transparent as to how we devote our resources in this area. And just as the financial system becomes more complex, so the judgements as to what we do and what we do not do are increasingly difficult. That is why we need a framework – a set of organising principles – that enables us to provide context and understanding to our endeavours, to provide a source of focus and rigour to our approach, and to motivate our people. The issues are, I believe, of general application. Though you will forgive me I am sure if I start by looking at the framework within which the Bank of England, as a non-regulatory central bank with a remit for system-wide stability, addresses the vulnerabilities. 2. Challenges in Creating a Framework  i)  Monetary Policy  I want to start by considering the governance of the Bank’s accompanying mandate, the conduct of monetary policy. This highlights the clarity of our accountability in the monetary policy arena. In line with many central banks, we have a mandate in statute – the Bank of England Act – to conduct monetary policy. The Government sets a target inflation level which we are required to meet.

We need to know how we will work with and communicate with public authorities and with the private sector. There is a different set of factors which impact our decisions in this area. First, our “must do” roles are dependent on crisis preparation and an adequate general understanding of how the financial system operates, with all the complexities entailed. Second, while each national authority has its specific responsibilities to fulfil, the speed with which decisions would then need to be made and actions implemented make it also essential to act effectively as a single operational unit. In the UK the FSA, HMT and the Bank have developed mechanisms designed to turn this into reality and to provide necessary confidence to the market. And third through testing programmes, we can obtain feedback as to whether our efforts are likely to prove successful and to refine preparation as we go along. The costs to the economy of failure would be high and the expectation is that we would be well prepared. This puts a strong onus on collecting in advance up to date information on firms and markets, or being confident of its availability and source. And also of regular and exacting testing programmes – working with other authorities and with the private sector. 6. Conclusion  So in conclusion, the field of financial stability oversight presents us with plenty of challenges.