samchain/econo-pairs-v1 huggingface dataset:
In view of the interdependence among all economic sectors, it is also essential to bolster this segment against fallout from other sectors affected by the current circumstances. Like other segments, the banking sector was affected by the lockdown, which caused a reduction in its capacity to extend financing, and we can also sense some reluctance to offer loans. Two factors are at play and are reducing efficiency of current measures regulating granting of financing; the first is banks’ preference – amid the current conditions – for granting financing to big companies with a strong financial position. This excludes a great number of companies affected by the crisis, which are in dire need of financing. The second is the continued gradual drop in banks’ willingness to grant financing as the crisis worsens and the cashflow problem escalates, as does its impact on companies’ solvency. All this comes as companies face an increasing need for financing. This scenario calls for taking the initiative and introducing comprehensive approaches to bolster this segment’s resilience and to incentivize it to extend more financing, which would guarantee sufficient cash flow across economic sectors and guarantee recovery through a comprehensive and integrated approach. In light of all of the above, the CBK had since March 2020 started to use its policy instruments to strengthen the sector’s resilience and to enable it to play a bigger role throughout this crisis; initiating macro-prudential measures and reducing regulatory requirements, thus expanding banks’ lending capacity to the range of KD 8-9 billion.

The impact would continue to grow as the crisis persists, since the cash flow crunch would force companies – including those previously in a good liquidity position - to shut down for failure to secure financing; either due to increasing financing costs or the banks’ reluctance to finance amid fears of growing default risk during the crisis. This could lead to companies’ bankruptcies, which, due to the chain effect between economic sectors could thus result in a contraction in non-oil GDP. The Committee’s Mandate To counter the impact and repercussions of the crisis on the national economy, the Higher Steering Committee for Economic Stimulus (The Committee), formed by the Council of Ministers Resolution (455) on 31 March 2020, and chaired by the Governor of the Central Bank of Kuwait, adopted a proactive approach to realize economic stability throughout the crisis. It laid down and initiated economic stimulus measures to prepare for the economic recovery stage that shall  Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -3-  follow once we overcome this crisis. Immediately afterwards, a national economic and structural reform plan needs to be launched and adopted by all the relevant stakeholders. The Committee listed several measures and governing principles to serve as a framework for all its activities, and they are as follows:  -  -  -  -  Introducing immediate remedies that provide practical and swift solutions to protect the national economy supporting economic reform and best possible resource allocation.
The second task of macroprudential policy is to manage structural risks, or cross-section risks, which could for instance mean that close links between different parts of the financial system at any given time will affect the risk of a crisis affecting the system as a whole. Here, I will primarily focus on the cyclical dimension of macroprudential policy. However, it is not so easy to draw any clear boundary between structural and cyclical problems on the financial markets, just as in other areas, such as the labour market. 1  2  For a few examples, see Geanakoplos (2009), Aikman, Haldane and Nelson (2010) and Borio (2012). BIS central bankers’ speeches  In Figure 1, the red line represents the normal cyclical fluctuations in the economy, the business cycle. The second curve in the figure represents the financial cycle. As I noted, the economic cycle and the financial cycle need not coincide, but can develop differently. Often, the financial cycle is assumed to have a lower frequency, fluctuate more slowly, than the business cycle, as illustrated in the figure.2 Links between the financial cycle and the business cycle can create problems A situation where both cycles definitely coincide is when the financial cycle shows a rapid downturn, as at the end of the figure. This was what happened in many countries during the financial crisis, and in Sweden during the crisis at the beginning of the 1990s.

Joseph Yam: Competition and cooperation among global and regional financial centres Speech by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Concurrent Panel Sessions of the Lujiazui Forum, Hong Kong, 9 May 2008. *  *  *  There are two points that I would like to make. First, given that many jurisdictions claim to be or wish to develop as international financial centres, we need to be clear about what actually defines an international financial centre. We in Hong Kong have given much thought to this, principally because Article 109 of the Basic Law of the Hong Kong Special Administrative Region requires that "The Government of the Hong Kong Special Administrative Region shall provide an appropriate economic and legal environment for the maintenance of the status of Hong Kong as an international financial centre". We obviously do not wish to fail in this legal responsibility. I do not believe that being the nth largest foreign exchange trading centre or the presence of many of the largest international financial institutions are good definitions for an international financial centre. Indeed, with the advancement of information technology, there may be a tendency for the market place to migrate into cyber space. In my opinion, an international financial centre is a centre in which the function of financial intermediation, which is so important for supporting economic growth and development, takes place on an international dimension.
As trading position can be transformed swiftly through the use of derivatives and hence may not be reliable, regulatory focus has shifted to assess internal risk models, rather than the instruments held at a point in time. In addition to external regulation, the Group of Thirty in its 1993 study of derivatives made recommendations at strengthening risk-management techniques and procedures. Another industry initiative was JP Morgan’s decision to release its own proprietary risk-management model for general use. In addition, changing consumer behaviour resulting from aging population, for example, calls for new and sophisticated products like pension funds and long-term debt instruments. Also, consumers’ expectations are likely to be higher as they now have access to more choices from more diversified markets. Finally, de-regulation has occurred because old regulations have not prevented the massive losses incurred by worldwide bank failures. In many countries, the losses caused by bank failures have been as high as 15% of GDP, with bank losses in Japan and France at an estimated 8% of GDP. In the light of these heavy costs, governments around the world have begun to look seriously at the cost of regulation. The latest initiative include the Japanese Big Bang, which would be complete by 2000. Should the Central Bank also act as the Supervisor? There are several arguments in support of the assumption of the supervisory role by the central bank. The first is efficiency consideration.

The article was more or less an explicit encouragement to readers to withdraw their money from the bank and go to the Riksbank to redeem it for gold: “Anyone who brings SEK 1,000 in banknotes to the Riksbank has the legal right to receive 50 SEK 20 [gold coins] and these currently have a value of SEK 1,450 – 45% profit on the most risk-free of investments”12 The final results were indeed an onslaught of people who wanted to redeem their banknotes at the Riksbank, who were therefore forced to raise the discount rate in order to defend the gold reserve. In connection with this, the Riksbank requested release from the obligation to redeem banknotes for gold, which was subsequently also granted. ...but it was also followed by deflation and recession However, shortly afterwards the trend was reversed. There were various reasons, including the weakening of international economic activity. But the most important reason for the severe turnaround in general prices was connected with the view of the monetary system that prevailed at the time. The political view was that Sweden should return to the gold standard as soon as possible, and to the parity that had applied before the war. To make this possible, the krona needed to be strengthened, which required bringing down prices and 11  See, for example, Fregert (2013) and Hasselberg (2021). 12 Statsvetenskaplig tidskrift, [Political science journal] May 1922, p. 151. 6 [14]  wages. It was therefore recognised that a period of actual deflation would be required.
While world trade has, on average, expanded by 16% over the period 2004–2008, Asia’s trade with the Middle East and Latin America has increased on average by about 30%. Asia’s trade with other emerging economies now stands at 13% of Asia’s total exports. A further recent development is the increasing international dimension of Islamic finance which is also influencing the global patterns of financial and trade flows. Islamic finance today has contributed to increasing the financial and economic ties between Asia and the Middle East. The emergence of new financial centres in Asia and the Middle East has seen stronger investment and financial flows between the two regions. With the greater internationalisation of this form of financial intermediation, it has also opened up the prospects for the developed economies to forge stronger financial linkages with these dynamic growth regions of Asia and the Middle East. The inherent features of Islamic finance require that financial transactions are supported by an underlying economic activity, thus ensuring that there is a close link between financial and productive flows. Islamic finance is also based on the principle of profit-sharing and therefore risk sharing. Islamic financial transactions clearly define the arrangements at the outset, and  BIS Review 94/2010  3  provides the incentive for the appropriate due diligence to be undertaken by the Islamic financial institutions to ensure that the profits are commensurate with the risks being assumed. Aspects of governance and risk management are therefore strongly emphasised in the arrangements.

The Government has also reduced its stake in the commercial banks over the most recent years and intends to have them largely or fully privatised by the end of the current electoral term next year. The privatisation process creates opportunities for continued rationalisation in the financial system creating ample opportunities in the period ahead, including closer ties with foreign financial institutions. It is tempting to put recent economic developments in Iceland into the context of developments in some of the other Nordic Countries about a decade ago. Liberalisation of the Icelandic financial markets was more or less completed in the mid 1990´s when the last restrictions on the movement of capital between Iceland and other countries were removed. Our liberalisation came a few years later than in the other Nordic Countries. You will recall that in some of the other Nordic Countries, liberalisation was followed by a boom period in the economy, partly or largely fuelled by a rapid growth of credit and in some cases large fiscal deficits. At the same time, these countries were pursuing a fixed exchange rate policy vis-a-vis the ECU. Developments in the domestic economies were such that the fixed exchange rate policy was gradually undermined, the rapid credit growth of banks resulted in weakening loan portfolios when asset prices fell, the exchange rate fixety gave way to floating, the currencies depreciated and inflation rose. The current account of the balance of payments also deteriorated.
The buffers can then be drawn on when risks materialise and credit losses occur. The case of counter-cyclical buffers is particularly interesting, first because it is one of the tools with a clear macro-prudential orientation and second, because the ESRB and the European Banking Authority (EBA) could join forces for implementing the framework in Europe. This is suggested by the European Commission in its recent consultation paper on the potential role of the ESRB and the EBA in defining policies and standards that national authorities should follow. Concluding remarks Let me conclude. I see three reasons to expect relevant changes with the start of macroprudential oversight in Europe. The first and most important reason is that better supervision should contribute to a more stable financial system. This is as much to the advantage of all players in the industry as it is to everyone in the wider economy. Second, integrating a macro-prudential perspective should lead to better regulation. In essence, systemic risk is the outcome of the actions of individual market players for the system as a whole. Regulation, which traditionally focuses on individual market players, can be improved by taking account of this potentially disastrous side-effect. Initiatives such as the counter-cyclical buffers and possible capital surcharges or other equivalent measures for systemically important financial institutions fall into this category. The third reason for welcoming the ESRB is that macro-prudential supervision could improve financial firms’ own risk analysis.

A decision on participation in ERM2 and on the central rate and fluctuation bands at which the krona should join would be taken through common accord of the finance ministers in the euro area Member States, the ECB, the central bank governors and finance ministers of the applicant country and the other ERM2 countries, i.e. Denmark at present. In practice, a decision would be preceded by contacts between representatives of the ministry of finance and the Riksbank as well as with our colleagues in a number of euro area Member States and Denmark. The first official step in the negotiations would be taken within the framework of the EU’s economic and financial committee (EFC). Only if the committee should fail to reach agreement would direct negotiations between the concerned central bank governors and finance ministers take place. Then, when the irrevocable conversion rate against the euro is to be determined in connection with entry into monetary union, this would be decided unanimously by the ECOFIN Council members from the euro area Member States and Sweden. Central rate in ERM2 The central rate is the krona/euro exchange rate against which the criterion of exchange rate stability would be evaluated prior to entry into monetary union. It is natural to seek to ensure that the central rate is set at a level which also becomes the conversion rate for the Swedish krona in monetary union.
As recently pointed out by the G20 Finance Ministers and central bank governors, recent events have highlighted the importance of sustainable public finances : those countries with serious fiscal challenges need to accelerate the pace of fiscal consolidation;  2)  Secondly, the announcement of a EUR 110 billion financial aid package for Greece, agreed between the European Commission and the IMF conditioned to a package of substantial fiscal consolidation measures by Greece contributed to alleviate concerns in the markets. 3)  Thirdly, to restore confidence in the whole euro area and to contain contagion, a plan with a broader scope has been adopted at the euro area level, the European Financial Stabilization Facility, for a global amount of 750 billion euro with the financial participation of the IMF. One of the key features of this Facility will be the possibility to be used on short notice without involving further national Parliaments. Finally, let me focus on the other recent actions of the European central bank which have been essential in response to these challenging circumstances. Central banks complemented these actions by specific and innovated measures 1)  After careful consideration of all implications of this option and based on its positive assessment of the Greek consolidation package , the Eurosystem decided to suspend the reference to credit rating and current market prices in the collateral requirements for marketable debt instruments issued or guaranteed by the Greek government.

They may not be efficient since security prices are not formed in national contexts but on global markets. What would not be possible in Paris or Frankfurt could still be allowed in London or New York for instance. They may also be counterproductive since they could deter activities away from our market onto others and they could significantly alter the liquidity of securities aimed by the restriction since foreign investors may shy away from them and turn to other opportunities. Let me be clear, though, this does not mean that nothing should be done. On the contrary, I believe that instead of banning and creating incentives to relocate certain activities elsewhere or circumvent those rules, it is preferable to attract and better supervise. This can be done: -  First by integrating OTC markets into regulated and supervised market infrastructures such as trading platforms, trade repositories and CCPs. In the case of sovereign CDS this will mean that all CDS written on euro area sovereigns should be compensated in a CCP located in the euro area. Incidentally, that requires a fair amount of standardization of these single name CDS. -  Second, by enhancing transparency, both ex ante and ex post to improve our understanding of the price discovery mechanism and our knowledge of actual net positions of financial institutions. 4  BIS Review 84/2010  -  Finally, by improving risk management by agents active in these markets and ensuring that these practices are compatible with their risk profile.
The central role of the dollar and dollar assets rests on several pillars:   confidence in the credibility and coherence of U.S. monetary policy, which preserves the long-run purchasing power of the dollar;    the unimpeachable credit quality of the public debt that anchors our system;    the resilience and vibrancy of our financial system; and    the efficiency and security of our payments system. These are strengths that we must constantly maintain. Ensuring financial stability is essential to advancing the common interests of the global economic system. We have much work still to do in the developed world. But the EMEs also need to be active participants in this conversation, given their rising weight in the world economy, already large contribution to global savings and growing importance in the creation of financial assets. Everyone benefits if the EMEs can liberalize and deepen their financial systems in ways that avoid some of the mistakes that we in the United States and others have made. To sum up, the rapid ascendancy of the EMEs in the world economy and the widespread improvement in living conditions associated with globalization are to be applauded. But aspects of this process have occurred in a manner that has led to strains on both a cyclical and secular basis. The current relationships in terms of capital flows and composition of growth are not likely to prove sustainable on a long-term basis. The issue of global rebalancing has received plenty of attention elsewhere.

For monetary policy in developed countries, this process has been equivalent to a sequence of positive supply shocks that took the form of a spontaneous decline in the import price of manufactured goods. All other things being equal, this terms-oftrade gain has allowed for a lower inflation rate for a given capacity utilisation rate. More fundamentally, and although things seem to be less straightforward in this area, it is possible that the increasing openness of our economies have structurally changed the wage and cost formation process in a manner that favours price stability. It is clear that heightened competition triggered by imports reduces the market power of firms at the national level. But, other more indirect effects are also detectable. According to studies carried out at the Banque de France, to be published in our next Monthly Bulletin 2 , the disinflationary impact of imports appears to be relatively independent of import volumes: the mere existence of potential competition renders the markets, in the words of experts, more “contestable” and influences behavioural patterns. These disinflationary forces are still present. However, there are now other more powerful forces that have the opposite effect. 1  V.Chauvin, D.Irac, N.Maggiar et H.Poncet, « L’information apportée par les anticipations d’inflation sur les salaires et la consommation dans la zone euro » ; J.Coffinet et S.Frappa, « Anticipations d’inflation dans la zone euro : que nous disent les marchés financiers ?
Monetary policy has only one instrument by which to achieve the objective of low and stable inflation, and the interest rate is a crude instrument. Hence, other objectives must be achieved by means of, for example, financial regulation and the tax system. In Norway, a number of arrangements functioned during the financial crisis. Banks’ capital adequacy ratios were at the outset fairly high, with high quality Tier 1 capital, and Norway had a bank guarantee fund financed, albeit only just, by capital paid in by banks. Norges Bank also holds ample foreign exchange reserves and was able to supply foreign exchange to banks. Norwegian banks felt the impact of the global financial crisis primarily as a result of reduced access to funding. Over time, banks have increasingly relied on fairly short-term funding in global markets to finance their lending. This is the main reason why Norwegian banks encountered problems when funding from foreign sources dried up in 2008. For Norwegian banks, the financial crisis essentially proved to be a funding and liquidity crisis. New and increased equity capital and liquidity requirements for banks can promote stability in the financial system. The requirements should probably be more stringent in Norway than the minimum requirement that is likely to be agreed internationally. It is also important to cooperate with the other Nordic countries to avoid a situation where more lightly regulated banks aggressively market loans in Norway.

BIS Review 69/2010  3  At a crisis meeting on 8–9 May, EU finance ministers therefore agreed on a EUR 500 billion European Financial Stabilisation mechanism to support countries unable to borrow in the market. The largest portion will be provided through loans guaranteed by individual euro area countries. The IMF will provide support in the form of loans upon application from an individual country, perhaps up to a total of EUR 250 billion. Several countries announced sharper spending cuts. The ECB will buy government and other bonds and offer extra loans to banks to promote the smooth functioning of markets. Moreover, the Federal Reserve has entered into agreements with other central banks to re-establish temporary dollar swap facilities to avoid failure in dollar funding markets. 3. Norwegian economy  To mitigate the effects of the financial crisis, central bank key rates were cut sharply in 2008 and are still close to zero in a number of countries. The key policy rate in Norway was also reduced from autumn 2008. Norges Bank also implemented a number of extraordinary measures to improve credit flows. Banks were provided with longer-term liquidity and direct access to US dollar liquidity, and collateral requirements for loans from Norges Bank were relaxed. On the advice of Norges Bank and a proposal from the Ministry of Finance, the Storting decided that banks would be entitled to exchange covered bonds for government securities.