samchain/econo-pairs-v1 huggingface dataset:
In the next few years, job growth picked up sharply and real estate markets soared, a clear sign that a growing number of people had regained confidence in the city. But, even during the booming 1980s, crime rates continued to increase—it wasn’t until 1990 that crime rates peaked and began a long downward trend. I returned to New York in 1983. The draw was an employment opportunity in finance. At the time, the city’s circumstances were improving but crime was still high, and there were still lots of problems caused by years of underinvestment. For example, I recall that the New York City subway system at the time was a near-wreck, with train speeds sharply reduced in many areas due to poor track conditions and dilapidated infrastructure. But, the seeds of improvement were in place. The financial services industry was beginning a long boom marked by financial market innovation and the rapid development of the nation’s debt capital markets—a boom that ended with the financial crisis. When I arrived, the build-out of the Battery Park City neighborhood was just starting. My first year, I lived at Gateway Plaza, which was the first big apartment complex in Battery Park City. However, it was early days and the nearest grocery store was about half a mile away north on West Street! Although a major economic downturn throughout the Northeast in the early 1990s took its toll on New York City—especially on employment and home prices—the city’s population continued to grow and its crime rate began to decline.

Recognizing the strong literary traditions of the Lotos Club, I would also note that I had the fortune of reading some of the great works of Middle English, including Chaucer. I also enjoyed being on both the freshman wrestling and golf teams—even if it was an odd pairing and our teams were not very good. In contrast to Columbia, the city seemed much less attractive. From my perspective as a naïve 17-year-old from suburban Massachusetts, it seemed outright dangerous and dirty. The danger was driven home immediately. One of my roommates was robbed his first day during a walk through one of the nearby parks. He didn’t understand, nor did I at the time, that certain places near Columbia weren’t very safe, even during daylight hours. While you could avoid the crime by being careful where you went in the city, there was no avoiding the pollution. During this period, New York City still had considerable manufacturing activity, many apartment buildings burned low-grade oil and incinerated trash, and this was before the days of automobile catalytic converters. This confluence meant that grit was 1/5  BIS central bankers' speeches  everywhere, and even for the non-fastidious—which I admit I was one—showers were an absolute necessity on a daily basis. Sometimes it was so bad that you couldn’t see across the Hudson River, which was just a few blocks away! In order to understand the situation the city faced in the 1970s, we have to look back a decade earlier.
2 The origin of the crisis was closely related to financial innovation and the creation of instruments that should have diversified risks. Most of financial innovation was used to circumvent regulation, allowing credit expansion with a weak capital base. Low interest rates, search for yields and a monetary policy that promised to rescue after severe falls in asset prices prompted the creation of a housing bubble. Enormous efforts were made to price many extremely complex financial instruments, but even those efforts failed to build valuation models that realistically considered the instruments’ insolvency probabilities. No evidence is necessary to assert that these methods failed because of an extreme event that struck everything. These failures were exacerbated by severe liquidity shortages and widespread panic in the markets. It is paradoxical that while asset price theories, and their application to the real world, are based on the existence of full arbitrage (consider, for example, the CAPM), corporate finance theories are essentially dominated by information asymmetries and are plagued by frictions from principal-agent problems. This dichotomy will have to be corrected over time to ensure that more realistic models of how financial markets work become available, models which will shed more light on economic policy recommendations. On crisis prevention and management A pervasive question for the past and current crises is whether they could have been anticipated.

But, in the gestation of asset price bubbles there was the commitment that if and when the bubble burst, the Fed would take care of the mess. This is exactly the same as the build up of currency mismatches in emerging markets when authorities promise to ensure exchange rate stability. In addition, we have witnessed a messy bail out of banks, and more recently, and more worrisome, bail out of countries with weak public finances. The issue of sustainability has become very relevant, in particular on the fiscal sphere. Economies cannot live forever beyond their means, and a serious effort of fiscal consolidation must be made, in particular in fragile industrial economies. It is ironic that after going through a very complex financial crisis, we are now worried about a very traditional crisis, caused by fiscal imbalances in the context of a fixed exchange rate regime, with potentially serious financial ramifications. The type of crisis that was analyzed and modeled in international finance at the most intellectually prolific time of Pentti Kouri. He would certainly have a lot to say about this. References Bordo, M., B. Eichengreen, D. Klingebiel and M.S. Martinez-Peria (2001), “Is the Crisis Problem Growing More Severe?” Economic Policy 16(32): 51–82. De Gregorio, J. (2009), “La Macroeconomía, los Economistas y la Crisis”, Cuadernos de Economía, Latin American Journal of Economics 46(134): 149–159. English version, Economic Policy Paper No. 33, Central Bank of Chile. De Gregorio, J. (2010), “Monetary Policy and Financial Stability: An Emerging Markets Perspective”, International Finance 13(1): 141–156.
•  Fifth, there may be a lurking fear that the government will be tempted to acquiesce to inflation and currency depreciation as the means both to repair its current finances (if it believes that revenue may be affected more quickly and positively than expenditure) and to reduce the real value of its outstanding indebtedness. •  Sixth, there may be a consequential fear that, as a means to that end, the government will seek to monetise its debt – "printing money" to fund the deficit. This would, however, require the cooperation of the central bank, and in most jurisdictions nowadays there is some form of prohibition on the central bank abetting such a strategy. More specifically, governments tend to be prevented – by force of law or moral pressure – from obtaining finance direct from the central bank (eg as might occur if the bank was forced to take up issues of government securities in the primary market), although the central bank is invariably permitted to buy (or sell) government paper in the secondary market as part of its discretionary monetary policy operations. Practical experience What of experience in the real world? Reference has already been made to the case of the United States. The US government is regarded as just about the best credit risk in the world and there is a huge global appetite for US treasury securities. The Federal Reserve has an equally strong track record in avoiding inflation.

Between these two extremes – the US and the no-hoper – there are of course many cases where the situation is less clear-cut or less predictable. Euroland provides an interesting example. Given the careful steps which were taken before the advent of the euro to ensure the insulation of monetary from fiscal policy and to outlaw monetary financing of budget deficits, we might wonder why the news of impending budget overruns should cause the euro to weaken. It seems that not only do credit spreads faced by individual deficit countries widen (presumably for fear, however slim, of sovereign default), but also the currency weakens for fear of governments conspiring with the central bank to abandon its mandate against inflation or to break the rules against monetary financing. A rather different interpretation could be that foreign exchange markets are merely exhibiting a pavlovian reaction: having been brainwashed to the effect that a deficit is inherently bad if it surpasses certain preannounced limits, the reaction when such a breach does occur is bound to be negative, even if analysis of the substance underlying the breach provides little or no justification for such a reaction. In the context of trying to identify a relationship between the fiscal position and the exchange rate, these examples demonstrate that there is no simple, pre-ordained relationship. The outcome depends on a wealth of factors, including the nature of the disturbances affecting public finances, the policy regime and policy responses, and the state of sentiment in financial markets.
Third of all, we had to continue fulfilling the traditional central bank’s functions – ensuring currency circulation, maintaining payment systems, contributing to ensuring financial stability, collecting statistical data and analysing the Estonian economy and financial system. 2. For a small nation, the transition to the euro can be considered high recognition. However, it was also a challenge. The smooth changeover required the joint effort of the entire nation. Residents and retail traders, entrepreneurs and banks – we all managed very well. [EURO AREA ECONOMY AND MONETARY POLICY IN 2011] 1. Monetary policy-making proved quite a challenge in the euro area in 2011. The second half of the year bore no resemblance to the first. The beginning of the year witnessed a continued, albeit slower, economic recovery, both on the global scale and in the euro area. Liquidity was plentiful and oil and other commodity prices soared, exerting price pressures in the euro area. To maintain price stability, the Governing Council of the European Central Bank decided to raise the monetary policy rates. This was done in April and in July. 2. The tide turned in the second half of the year, when waning confidence and growing uncertainties in the financial markets started curbing global growth. This was brought about by market participants’ concerns about the public finances development in several euro area countries. Changes in the economic environment were accompanied by a sharp decline in consumer and corporate confidence in August.

The same systems that allow international trades to be conducted from a hub are also conduits by which volatility is transmitted globally. For the risk to be satisfactorily managed, collaboration is necessary. Regulatory collaboration can take many forms. It begins from interaction on occasions such as this, which represents an opportunity to compare notes, discuss issues and exchange views. Such informal but regular contact should not be discounted. Indeed, I understand from my colleagues that a series of telephone conversations and e-mails with regulatory counterparts elsewhere in the aftermath of Sep 11 contributed considerably to a quick appreciation of the type, and magnitude, of issues that could be expected. This contributed to the avoidance of instability in individual markets. Looking back, we can all agree the markets stood up remarkably well. International meetings and joint forums such as IOSCO are a further step towards setting the foundation for more structured lines of communication amongst regulators. Participation in IOSCO taskforces requires resources but helps to develop better appreciation of characteristics unique in other markets, and alternative approaches to addressing regulatory concerns. It is in recognition of this that MAS has devoted resources to active participation in IOSCO’s committees and working groups. We have also found the Memorandum of Understanding (“MOU”) to be a useful instrument for setting out mutually agreed procedures by which regulators may exchange information and provide mutual assistance.
3 The cross border impact of the global financial crisis has forced a fundamental rethink about whether this global financial safety net is functioning as efficiently as it should, and whether more needs to be done to contain the systemic spillovers from sovereign crises. A key means by which the Bank of England pursues its mission of monetary and financial stability is through the provision of liquidity insurance to the financial system – something it has been doing in one form or another since David Hume’s time. In some ways, this makes the Bank of England the domestic safety net for the liquidity needs of solvent financial institutions. As Hume himself put it: “private bankers are enabled to give…credit by the credit the receive  1  See Pagan (1865). 2  See Hume (1758). 3  These crises have also spawned a rethinking of capital flow management tools – akin to macro prudential policy for global flows – a topic which shows promise but one that I will not cover in this speech.

BIS Review 37/1998  ˝
If the country is strongly dollarised or has a currency board (Argentina 2001) or another form of fixed exchange rate regime, there is no possibility to take certain measures, such as supply the economy with a large amount of liquidity. Finally, I have seen that in the cases where the financial sector is large in relation to the rest of the economy (Thailand 1997), the negative contagion effects to society as a whole are much greater. How can one prevent financial crises? In my experience, much can be achieved if the authorities and the financial participants together draw up effective preventive measures and plans for good crisis management. One clear and positive conclusion from the crises in the past twenty years is that good crisis management can save large amounts of money and reduce disruptions to society. On the other hand, it has been demonstrated that bad crisis management aggravates crises, partly by spreading uncertainty among the general public and the financial market agents. Good crisis management involves creating good laws, regulations and supervision. I have seen deficiencies in these fields in many countries. The legal framework may be insufficient, including the external conditions for good supervision, such as poor auditing and accounting. In some countries it is even possible to question whether a rule of law prevails there; that is to say, whether the laws are the ultimate guiding principle as to how the country is governed.

It is aimed at adopting best practices in this area, and at implementing the recommendations given by specialized assessments of international financial institutions that assist this process. Allow me to state once more that the Bank of Albania is completely committed to provide all the necessary assistance for strengthening the capacities of the Deposit Insurance Agency in Albania, in view of its very important mission. I wish good proceedings to this seminar. 3/3
My third observation is that those who said that the Asian crisis was the death knell of Asia as an economic force - and there were many of them - seem to have been wrong. There has been remarkable resilience, even in the worst-hit economies, and a will to reform and restructure that has helped put a number of economies back on their feet even during a time of global economic downturn. Progress has not been evenly spread throughout the region, and there are still causes for anxiety. But, as the world economy shows signs of recovery, the prospects for the region, if not dazzling, look somewhat brighter. It is now my great pleasure to introduce our speaker and discussant. From the late eighties until very recently, Stan Fischer has been very much at the centre of world economic and financial crisis - and its solutions - first at the World Bank and then as First Deputy Managing Director and subsequently Senior Adviser at the IMF. He has played a practical role - often a crucial one - in addressing, preventing and resolving crises, and he has written extensively on the subject. Asia, no less than other regions of the world, has benefited from his expertise, and we are very honoured to have him here to talk about the lessons that can be learned from the recent crisis. Steve Grenville served for 20 years with the Reserve Bank of Australia, and was Deputy Governor of that Bank from 1996 to 2001.

Before joining the Reserve Bank, he served in the OECD in Paris, and before that he spent time with the IMF in Indonesia. He played a pivotal role during the Asian crisis, and was instrumental in Australia’s involvement in three of the larger support packages in the region. It is a great honour to have him here as discussant today. BIS Review 33/2002  1  Stan and Steve are old friends of mine. I therefore think it is right for me to comment on the positions in which they now find themselves after careers totalling around 40 years in central banking, and to try to see if this sheds any light on the eternal question: “What happens to central bankers when they cease to be central bankers?” I speak from a position of intense personal interest because the recent resignation of Don Brash of the Governorship of the Reserve Bank of New Zealand leaves me - so I am told - with the doubtful distinction of being the longest-serving central bank chief in the region. Don Brash, who has a reputation for making original career choices, has reportedly gone into politics a precedent which, let me stress, I have no intention of following. Stan and Steve have followed what the IMF would no doubt refer to as a “two-corner solution”. Since leaving the IMF earlier this year, Stan has firmly anchored himself to one of the world’s largest banking and finance groups as its Vice-Chairman.
Muhammad bin Ibrahim: Issues surrounding intellectual property Welcoming remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Intellectual Property Financing Conference 2014, Kuala Lumpur, 23 September 2014. *  *  *  It gives me great pleasure to welcome you today to the 2014 Intellectual Property (IP) Financing Conference – themed “IP Potentials in Financial Landscape Evolution”. I would like to thank the Malaysian Intellectual Property Corporation and the Asian Institute of Chartered Bankers for co-organising this event with Bank Negara Malaysia. We are also grateful to Secretary General Dato’ Sri Alias bin Haji Ahmad for joining us today to deliver the keynote address and officiate the conference. In the age of the information economy, the importance of intellectual property as a key enabler of productivity and economic growth has become significantly more pronounced as intangibles make up an increasing proportion of business investments. This conference was carefully designed to raise issues surrounding IP. Many issues and questions require resolutions and insights. How do we achieve strong and effective IP protection that will encourage companies to bring new innovations to the market? How do we unlock the value of IP within businesses and encourage the financial system to make better use of this value in financing decisions? How do we start to develop a more transparent market for IP assets? These are some of the issues and questions that the Conference should explore to optimise the full potential of IP in Malaysia.

Therefore, it is an opportune time that the boards and senior management of the financial service fraternity in Malaysia to begin to actively explore pragmatic approaches to assimilate IP into existing financing considerations. An important starting point is building a stronger knowledge base of IP issues within financial institutions. This includes identifying staff within your institutions to learn about these issues and providing them with local and international opportunities for training or exposure in IP. The industry, working together with relevant authorities, agencies and trade associations, should also come together to agree on specific initiatives to overcome barriers to the more effective use of IP assets in financing considerations. This includes developing practical guidance for both businesses and financial institutions in identifying, managing and valuing IP assets, and a way to include such assets within an institution’s existing credit assessment procedures. Such initiatives should also address the need for a clear and unambiguous legal documentation for a legal charge over IP. This promotes a cost effective and consistent approach in perfecting legal rights across the industry. In addition, processes to facilitate the continuous assessment and reporting of IP assets of borrower firms will also promote transparency on the performance of the assets and provide early signals of potential distress. Through such efforts, IP can be further developed as an individual asset class that supports lending decisions.
Even if it would be premature at this stage to try to elaborate further on how to maximize the positive effects of this major innovation, no doubt the new international monetary equilibrium will have to be kept under review as a key element of the new architecture. From the outset, effective means of coordination will have to be found to avoid excessive misalignments and disruptive corrections. The world is fully justified in expecting a responsible leadership from these major currencies blocs, which should be actively mindful of their global responsibility and resist the temptation of “benign neglect”. Each of them. Lastly, at a time when de facto more and more responsibilities are being given to the international financial institutions, and particularly to the IMF, the question of their political accountability will probably be raised with increasing insistence. Indeed, this question already arises from time to time, although not always with full awareness of the nature of our institutions and of the powerful checks and balances already enshrined in their Articles of Agreement. In this context, and as far as the IMF is concerned, is there anything that could be done to strengthen what one might call the political accountability or legitimacy of our institutions? At this stage, this would require at least a few organizational changes, which would make more explicit the tie that binds us to the governments we depend on.

However, the actual effect of the structural change towards more market-based financial transactions could be larger than the share of external financing from the market would suggest. The existence of market-based financing through increasing competition within the banking sector may have affected the terms and conditions of bank lending in the sense that banks are now more clearly no longer the only potential supplier of external funding for all but the smallest firms. In other words, the contestability of external financing may have increased, with potential competition from market-based financing limiting the scope for banks to profit from lending relationships. It could be added that banks have been encouraged to take part in the process of securitisation by undertaking investment banking activities such as underwriting, which uses their capacities for collecting information as well as private information based on existing credit relations. This also tends to boost the share of non-interest income in the total revenues of banks. The changes in the structure of the financial system and the role of banks are also illustrated by the emergence of new types of players in the financial system. Most apparent is the rise of institutional investors who are gaining a more important role in allocating savings from the household sector to the corporate sector, both domestically and across borders.