samchain/econo-pairs-v1 huggingface dataset:
I would nonetheless characterise the broad trends of the past few decades as follows:  Firstly, there has been an increase in electronic trading across most markets. This is particularly the case in markets for inherently liquid instruments – i.e. those which are simple and homogenous, such as equities (Chart 3). 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  Second, at least initially, the migration from voice to electronic trading has allowed for far greater transparency around the prices at which market participants are both willing, and able, to transact. This in turn has given rise to a plethora of new data, which combined with advances in technology, has led to the growth of algorithmic trading, including that at high frequency (Chart 4). And, for the purposes of this speech, by ‘fast markets’ I mean those markets where these trends have gone furthest: most obviously major equity, foreign exchange (FX) and futures markets. In these markets, there is less need for intermediaries to warehouse risk, due to the inherent liquidity characteristics that attract a wide range of participants, making it easier to find a near-instant match between buyers and sellers. This has allowed the emergence of new technology-focused, smaller, non-bank, market participants that specialise in using algorithms to execute and route orders at high speed. Chief amongst these are principal trading firms (PTFs), who trade on a proprietary basis, using sophisticated technology (Chart 5).

2  BIS Review 61/2001  d.  Fourth, the consolidation should not lead to loss of service for small depositors, for whom affordable banking services are a necessity. e.  Fifth, any cross-border partnerships should not result in the foreign partner taking control of a Singapore bank. I will elaborate on these five considerations in turn. Managing the integration Consolidation, whilst necessary for the local banks to be competitive, is not in itself sufficient to produce strong banks. Having merged, the banks will have to integrate and rationalise different management teams, information and risk management systems, and internal control procedures. The reality is that some mergers work while others do not. Good execution of a merger will produce a stronger bank, by yielding the expected synergies and cost savings. Poor execution will only lead to a more unwieldy and riskier bank. A larger scale and wider range of activities will demand stronger and more institutionalised management. Singapore banks have benefited from having their principal shareholders, including family shareholders, play an important role in overseeing the banks, although most no longer run the management. The controlling families have had the entrepreneurship and business acumen to build up the banks, and their long-term interests were substantially aligned with those of the banks. This situation currently serves us well, but is not likely to endure over the longer term.
Against this background, the Riksbank has contacted the CPI Enquiry, set up by the Government, to obtain assistance in specifying an indicator of underlying inflation that is likely to be widely accepted and can be published regularly by Statistics Sweden. In the future, such an indicator might be able to have a more direct function in monetary policy, either by replacing the CPI as the target variable or by serving as an operational target or aid in the continuous work of constructing policy. The Riksbank has also asked Statistics Sweden to publish, for the time being, one or more indicators of underlying inflation together with the CPI. Perhaps I should emphasise that in no way do these initiatives alter monetary policy’s fundamental commitment to price stability. The current situation for monetary policy The question of transitory effects leads me on to current monetary policy. Transitory effects are playing a major part in the CPI’s present development. As a result of tax changes, lower interest rates and a lower oil price, since December the Riksbank has had to revise the 1998 CPI prediction downwards by about 1.2 percentage points. In 1999, too, transitory effects mean that CPI inflation will be lower than we envisaged earlier. Thus far, however, the altered picture of inflation need not have any sizeable consequences for monetary policy. It is now too late to influence this year’s path for inflation more than marginally.

The favourable liquidity situation facilitated the rapid transmission of the key interest rate cut to the interbank and the primary market, hence allowing for the reflection of this cut in other interest rates in the economy as well. The Bank of Albania considers that the inflationary pressures remain well contained all through the time frame of the monetary policy effect: the effect of supply-side factors is expected to be offset by the downward pressures arising from the performance of demand in economy. The projections for inflation and inflationary expectations remain well-anchored around the Bank of Albania’s target. Therefore, the central bank considers that monetary conditions in economy are adequate to warrant the safeguard of price stability in the medium-run and to boost economic development further. The Bank of Albania will, in response to actual and expected economic and monetary developments, continue to pursue a prudent monetary policy, thus providing the required monetary conditions for achieving the inflation target and safeguarding macroeconomic stability. 4  BIS Review 170/2010
In fact, this strategy is known as the Greenspan put, in reference to interest rate reductions in the aftermaths of severe financial turmoil, such as the stock exchange downfall of 1987, the collapse of LTCM in 1998, or the technological stocks in the early 2000s. 7 In fact, from the standpoint of liquidity provision and potential downward pressures on inflation, a reduction in interest rates is generally recommended. The problem is that this response provides an incentive to adopting more risk-prone behavior, since investors perceive that they will have the put option available later. Therefore, it is advisable to not only provide the liquidity, but also carefully monitor the market’s operation to prevent overexposure to these risks in the future. Indeed it can be argued that bubbles are difficult to identify. For example, Gürkaynak (2005) finds that, for every work identifying a bubble, there is another one finding the opposite. At the same time, it is not so clear how much of a given bubble can be affected by raising the interest rate and the necessary magnitude of the adjustment in order to make any difference, because, by definition, a bubble is determined by “non-fundamental” price movements. Thus, although after seeing the critical situation that developed financial markets have been enduring, a more proactive monetary policy strategy might have been advisable, but it is hard to believe that such a strategy could have averted this crisis by itself.

Vergara, R. (2003). “El Dinero Como Indicador de Política Monetaria en Chile”. Cuadernos de Economía 40(121): 707-715. 8  BIS Review 150/2008
We have other models in which the probability of such distress may be related to various characteristics of banks, such as whether they are comfortably within thresholds for capital adequacy – the argument being that as they get closer to the threshold, depositors become less confident about the stability of each other’s behaviour. 26 And we have models in which bank capital is affected by macroeconomic developments; and models in which, through financial accelerator-like mechanisms, impaired bank capital affects the supply of credit, 27 and so potentially macroeconomic variables. But we don’t yet have models in which the determinants of the probability of banking system distress are influenced by the macro environment; and in which such distress can, really, occur and affect the macro environment. That seems to call for somehow embedding gametheoretic strategic interactions within dynamic macro models. 28  23  See Allen, F, and Gale, D, (2007) “Understanding Financial Crises”, Oxford University Press. 24  Commenting on a recent paper by Michael Woodford, Charles Goodhart (pointed out that the model incorporated credit risk premia but not default. Everyone is hoping that Woodford picks up the challenge. (See Goodhard, C, comments on “Credit Frictions and Optimal Monetary Policy” by Curdia and Woodford (2008). These were given at the 7th BIS Annual Conference. 25  See Diamond DW, Dybvig PH, (1983) “Bank runs, deposit insurance, and liquidity” Journal of Political Economy 91, pp401-19.

First, while papers are still produced in the tradition that “macroeconomists can safely go on ignoring finance”, we – policymakers – are having to make sense of a macro environment in which the supply of credit has been interrupted by problems sourced in part to swings in risk premia, and quite possibly swings in risk aversion. Models incorporating risk premia – and, indeed, embracing bubbles – might just help us with that. But it is striking that, so far, the progress in finance hardly features in the macro models used around the world for forecasting. Indeed, such models barely recognise the existence of financial instruments beyond risk-free bonds and equities. 19 In modern DSGE models, asset prices (and so risk premia) merely reflect economic developments; they are not “actors” in any way. Even if we were to accept that risk premia are not “actors”, for policymakers they might serve as useful diagnostics of what is going on in the economy – of the nature of the underlying shocks – given that asset price changes are typically apparent some time before the associated real economy adjustments. On that view, we need research that will help us read the “risk premia” tea leaves. For example, an increase in premia that could be traced to an increase in the correlation between consumption and investment returns, might point to a prospective increase in households’ precautionary saving.
This is a balance that is much easier to achieve in theory than in practice! However, as I have explained here today, my assessment at the latest monetary policy meeting was that it will still be necessary to keep the repo rate at this low level for a long time to come. Thank you! BIS Review 111/2009  7  1. Financial markets functioning better Basis spread, basis points 400  400 Sweden  350  350  Euro area USA  300  300  United Kingdom  250  250  200  200  150  150  100  100  50  50  0  0  Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09  Note.

Our journey offers quite a few insights on the reality of digitalization in some parts of the country: While it is true that many among our target groups in Sabah do indeed own a smartphone, in many instances the digital remittance applications were not compatible with these simpler devices; and While using digital application is a ‘no muss, no fuss’ to many of us, barriers such as language and complexity of the process, inhibited many of the migrant workers from using digital remittance services. To overcome such challenges, the Project team collaborated very closely with the remittance service providers. To enhance the usability of the remittance apps among the target group, adjustments were made including by widening the language options and simplifying the process of using the apps. To further assist our target groups, some of the providers developed step-bystep videos on how to use their apps. They also sent their staff to join our program and helped to offer one-to-one lesson to the migrant workers – importantly, such interaction allowed them to better understand the needs of this target market. 2/3  BIS central bankers' speeches  Such dedication, enthusiasm and commitment showed by all of you is indeed what drives the success of this Project. On behalf of Bank Negara Malaysia, I would like to express our deepest gratitude to the Project Team, the remittance industry, the Greenback ‘ambassadors’, the plantation companies and other employers, consulates, banking institutions, and all parties who have been with us throughout this journey.
Over the last few months, leverage has generally fallen, especially among those institutions that were most highly leveraged. 20 The fall reflects, in part, recapitalisation efforts, lower risktaking as a result of more prudent lending standards, and the shedding of assets and/or limitation of the growth in balance sheets. It also reflects pressure from the market and supervisory authorities to control leverage, as well as expectations regarding the possible introduction of a leverage ratio, in addition to risk-based capital requirements. 21, 22 Likewise, capital position ratios of large and complex banking groups in the euro area are improving. The earnings of these banks have recovered, while the growth of total assets and of risk-weighted assets has slowed down and capital has increased, both from public and private sources. These developments were necessary in view of the expected increase in non-performing loans as a delayed result of the economic crisis. 18  W. Bagehot, “Lombard Street: a description of the money market”, Scribner, Armstrong & Co., 1873. 19  With regard to the importance of an accommodative monetary stance at the margin, see, for instance, T. Adrian and H.S. Shin, “Financial intermediaries and monetary economics”, Handbook of Monetary Economics, forthcoming. 20  It should be noted that this effect only arises when the impact of losses on the capital base is greater than the reduction in the value of marked-to-market assets on the balance sheet.

Regulators also need to strengthen their cooperation to minimize possible cross-border spillover risks. On this note, I am glad to report that tomorrow CBRC and the Bank of Thailand will enter into a MoU on Banking Supervision. The third area of cooperation is to enhance financial inclusivity in our region. The financial sector must be aware of its social responsibility and take active roles in promoting financial access and inclusive growth. People at large need to have access to basic financial products at minimal prices, together with adequate financial literacy and financial planning skills. In summary, financial connectivity can be and needs to be enhanced in Asia. AFCA, with its diverse membership, is in a unique position to deepen financial cooperation and promote connectivity among its members. AFCA can play significant roles to strengthen the Asian financial sector and Asian economies by improving productivity, building stronger immunity, and promoting more financial inclusivity. In closing, I would like to congratulate once again the Chinese leadership, CBRC, and AFCA. I wish AFCA very fruitful years ahead. Thank you. 3
Foreign holdings of the Thai government and Bank of Thailand bond outstanding are less than 9 percent, compared with more than 30 percent in some other emerging markets in the region. External debt of the corporate sector has been relatively low, and mostly belongs to large companies, which manage their exchange rate risk sufficiently well. BIS central bankers’ speeches  1  While Thailand’s financial strength serves as a buffer against external shocks, it is important that the private sector is not complacent and should continue to be prudent in their financial risk management. Global financial volatility can definitely trigger two-way movements of currencies and asset prices. As a small open economy, Thailand cannot escape, but to find effective ways to live with the global volatility. On the Bank of Thailand’s part, under the flexible exchange rate regime, currency movement serves as the first line of defense against unexpected external events. We continue to be prudent in using an appropriate mix of policy tools to help prevent excessive volatility of the currency and asset prices. In addition, to build market resilience in the longer run, we embrace on financial market developments, as deep and liquid markets would better absorb large swings in capital flows. We also plan to further relax capital flow regulations to allow more balanced flows in and out of the country, which would enhance stability against short-term speculative flows.

In addition, the use of local currency in regional trade and investment has been promoted to lower business transaction costs and mitigate volatility of the major currencies. We hope that policy to strengthen financial connectivity with our neighbors will facilitate closer economic integration for the shared benefits of the region. The second plan is the Payment Systems Roadmap. The plan is aimed to promote safe and efficient electronic payment services with new technologies and innovation, with a view to reducing transaction costs, improving governance standards, and being supportive of expanding economic activities. In particular,  BIS central bankers’ speeches  3  integrated payment channels, such as mobile phones, internet, debit/ credit cards, and emoney along with a competitive fee structure, will support e-Commerce/ m-Commerce and benefit both businesses and consumers alike. The Bank of Thailand will also continue to work with regional regulators to advance payment systems connectivity to support international trades, labor movements, and tourisms. Under this roadmap, the Bank of Thailand has worked closely with the government to advocate the idea of digital economy by taking a lead in the National e-Payment Plan to promote Any ID infrastructure and debit card usage. Development of a new payment infrastructure as the “open architecture” to allow network interoperability among various types of players will lower payment fees and discourage the use of cash, thus resulting in much lower operating costs and higher efficiency for the corporate and banking sectors.
We are the only place in the world that practises an English and Chinese bilingual common law system that inspires confidence from overseas and Mainland investors alike. We have an ecosystem of topnotch financial institutions and professional services firms that are trusted by asset owners and asset managers to look after their investments. These unique advantages cannot be easily replicated anywhere else in the world. 15. Of course, apart from providing a convenient conduit for overseas investors to enter the onshore equities and bond markets through the Connect schemes, Hong Kong’s stock market has long been a venue for Mainland companies to raise funds and for global investors to get exposure to Mainland enterprises. Today, over 1,100 Mainland enterprises are listed on the Stock Exchange of Hong Kong, with a total market capitalisation of nearly HKD22 trillion and an average daily trading volume of around HKD60 billion. 16. And we are not standing still. We are doubling down on our work to enhance our financial platforms, build more connections with the Mainland’s markets and consolidate our strengths. 17. One exciting example is the two-way cross-boundary wealth management connect scheme for Greater Bay Area residents, announced earlier this month. This new Connect scheme links up Hong Kong’s asset management industry to one of the most economically vibrant and wealthy regions in Mainland China, with a population of 60 million and a per-capita GDP of some $ Guangdong is also home to some 290,000 high net worth families.

Since the benefits are mainly the result of structural improvements and the costs are due largely to the greater difficulty in steering inflation and economic activity, it is difficult to offset the advantages of a monetary union against its disadvantages. Whether a monetary union, on balance, creates benefits or causes costs depends on a whole range of factors. Robert A. Mundell can be summarised as follows: in order to form a so-called optimal currency area, the member countries must be structured along similar lines and exhibit a high degree of flexibility. The benefits of a monetary union consist in a reduction of transaction costs for changing money, the elimination of internal exchange rate uncertainty, tighter competition thanks to easier price comparisons, the expansion of trade within the common currency area, the prevention of competitive depreciation and speculative attacks on a currency, and growth in the liquidity of the financial markets. The most significant costs of a currency union arise from the loss of the individual countries’ independent monetary policies. The loss of monetary policy autonomy is particularly felt when the size or number of asymmetric shocks is large. Such disruptions affect the economic structure, business activity and inflation of member countries in different ways. Thus, they cannot be combated with a uniform economic policy. A controversy that has not yet completely died down is this: was the reunification of the two Germanys after 1989 a shock that significantly impaired the prospects for a successful integration of Germany into the European Monetary Union?
12. As I said earlier, we have a long tradition of universal banking in Hong Kong and we have not seen our universal banks turn into aggressive trading and sales outfits or principal risk-taking hedge funds. But we can definitely see the potential danger. We therefore need to ensure that our banks do not take on excessive risks in their chase for higher profits and bonuses. Banks holding customer deposits must keep their responsibilities to their depositors foremost in their minds and not allow their proprietary trading or i-bank activities to overshadow these responsibilities. If they fail in this regard, they will make the case for narrow banking themselves. Branch vs. subsidiary operations 13. Another strand coming out of the debates on banking structure relates to the question of whether banks should be required to operate in host jurisdictions as subsidiaries. There are two angles to be considered here: supervision and resolution. Some jurisdictions have taken the view, long before the Global Financial Crisis, that overseas banks operating in their jurisdictions should take the form of subsidiaries rather than branches. The main motivation, as I understand it, is that the host supervisors will have a much stronger regulatory handle, such as capital requirements, prudential limits, auditing, etc, to supervise a locally incorporated subsidiary than a branch. In a resolution scenario, many also favour subsidiarisation because it provides a clear legal entity structure which is easier to handle nationally under an insolvency situation. 14. But subsidiarisation is far from being the panacea for all ills.

Norman T L Chan: Universal banking – Hong Kong’s perspective Keynote address by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the opening session of the Asian Banker Summit 2011, Hong Kong, 7 April 2011. *  *  *  Distinguished guests, ladies and gentlemen, 1. I am very pleased to address this important conference this morning as it provides a timely occasion for us to take stock of what is happening to our banking industry at a time when the international financial markets are recovering from the Global Financial Crisis. Indeed, the landscape of banking has undergone very significant changes since the eruption of the crisis in 2008. And more changes are in store. Some might even argue that banking will evolve beyond recognition when compared with what we knew previously. Of course the international banking reform package, ranging from the new capital, liquidity and leverage regime under Basel III, the treatment of Global Systemically Important Financial Institutions to the use of macro-prudential tools etc, will have different implications for different banks and different jurisdictions. It is not my intention to discuss today the new international standards that have been and are about to be adopted as these standards have been talked about very frequently amongst bankers and regulators.