samchain/econo-pairs-v1 huggingface dataset:
But the moves are still small relative to those we saw ahead of the Referendum. On a day-to-day basis, we continue to use our balance sheet in support of monetary policy and financial stability. Our regular market operations will continue to keep market rates anchored to Bank Rate, and we will continue the programme of gilt reinvestments that maintains the stock of APF purchases at its target level for as long as the MPC choose to maintain it there. And our monthly Indexed Long-Term Repo liquidity facility continues to see regular usage, with £ allocated in September’s operation. Looking further ahead, the TFS is now closed to new drawings, and will gradually unwind in the coming years as banks repay their loans. In June the MPC gave updated guidance that it will not reduce the stock of asset purchases until Bank Rate reaches around 1.5%, and any decision on what happens then will of course be a decision for the MPC of the time and will depend on the economic circumstances prevailing at 28  the time. As and when our balance sheet shrinks, it is likely that its size will return to being determined by the level of SMF participants’ demand for reserves (as well as the amount of banknotes in circulation), rather than by the quantity supplied.

7  All speeches are available online at www.bankofengland.co.uk/speeches  7  One of the lessons of the crisis and the ensuing ten years was that we need to continuously challenge ourselves to ensure that we are prepared for the future. The Bank has taken that to heart. Today I want to highlight two innovations. First, the Bank has recently supplemented the ability to provide liquidity to our expanded set of members by ensuring that we are operationally capable of accepting equity collateral, should the need ever arise. And, second, in pursuit of a more diverse and resilient financial landscape in the UK, we have been progressing work to enable Islamic banks to hold Bank of England reserves to meet their regulatory requirements for holdings of high quality liquid assets in a way consistent with Islamic commercial jurisprudence. And as a result, today I can announce that we will shortly be establishing a new subsidiary of the Bank, to house the Shari’ah Compliant Facility; this will be a special purpose vehicle, called the Bank of England Alternative Liquidity Facility (BEALF). This will also be the first non-interest based liquidity facility to be offered by a major Western central bank, providing important structural support to the UK’s Islamic finance sector, and further strengthening the UK’s position as an international financial centre. 22  Enhancing our policy readiness  With all of this capability comes the need for accountability. We are running a much larger balance sheet than ever before.
Much of the increase in debt issuances here was by Asian issuers—mostly from China, Indonesia and India—raising debt capital in Singapore for the first time. Green bonds are also gaining traction, with local and foreign issuers issuing over $ billion of green bonds here. The life insurance industry is doing well, with net premiums growing by 16% p.a. over 2016 and 2017. Growth was boosted by Asian consumers demanding more savings and investment products in search of yield. Non-life insurance business is, however, facing structural challenges and weak growth. Net non-life premiums grew by just 2% p.a. over 2016 and 17. 7 / 11  BIS central bankers' speeches  Business conditions have been challenging globally, due to excess capacity and downward pressure on premiums. But Singapore remains attractive as the premier reinsurance hub in Asia. Global reinsurance players such as Swiss Re and Munich Re have recently set up their regional headquarters here. And we are making a push into alternative risk solutions such as risk pools and insurancelinked securities or ILS. Foreign exchange trading declined last year although we remain the third largest FX centre globally. Singapore’s average daily FX trading volume grew by 20.5% in 2016 but declined by 6.7% in 2017. This was mainly due to lower volatility in key currencies such as the Japanese Yen; and some temporary trading desk turnover which has since been filled.

The global economy is also being supported by accommodative macroeconomic policies. Monetary policy remains highly accommodative in the Eurozone and Japan. Fiscal stimulus in the US will more than offset the gradual unwinding of monetary accommodation. Across the major economies, labour markets are strengthening and wages are rising, underpinning consumer demand. The global growth cycle has matured and is probably past its peak. While growth remains healthy, it has ceased to accelerate, particularly in the Eurozone and Japan. In the Eurozone, the initial spurt in domestic spending last year has stepped down to a more sustainable pace. In Japan, the fiscal boost is over. 1 / 11  BIS central bankers' speeches  The US economy, albeit still growing strongly, is already at full employment. At least part of the fiscal stimulus is likely to be dissipated through higher inflation. In China, investment growth has slowed, with the shift in policy focus to addressing the country’s vulnerabilities, such as high levels of indebtedness and excess capacity. From a sectoral perspective, the global tech cycle has moved into a consolidation stage, with inventory build-up fading. The Global Manufacturing PMI has eased in recent months to 53.1 in May, although it remains in the expansionary zone. Tail risks to global growth have grown significantly over the last six months. Earlier this year, I described the “Goldilocks” state of the global economy—healthy growth, low inflation, and easy financial conditions.
Including exchange rate effects, in Sing Dollar terms, MAS recorded a net loss of $ billion. In short, we made good investment gains, but when measured in Sing Dollars, these gains were more than offset by the strength of the currency. If we had reported our P/L in an international currency it would show a healthy profit. The effect of a strong Sing Dollar on our reserves should be seen in a broader context. First, the international purchasing power of our reserves is unaffected by strength of Sing Dollar. MAS’ foreign reserves serve two primary purposes in times of crisis: they finance our imports from the rest of the world, and safeguard the value of our currency. On both fronts, it is foreign currency value of the reserves that matters. Second, the strength of the Sing Dollar has safeguarded our domestic purchasing power. It has helped to moderate the increase in Singaporeans’ cost of living. For instance, while global oil prices rose by 20% in FY2010, domestic prices of oil-related items increased by only 10%. Or take another example of food prices. During FY2010, the rate of increase in food prices in Singapore was about half of that in our major trading partners, which includes both advanced and emerging economies. Last, I will elaborate on our efforts to maintain high regulatory standards. MAS is well-placed to meet higher global standards emerging from international regulatory reforms following the crisis.

Singapore’s regulatory regime already meets or exceeds international norms, and this has enabled us to weather the financial crisis relatively well. Following the crisis, international regulatory standards are being raised. We are well-placed to meet them. Let me start with banking. MAS announced last month we will require Singaporeincorporated banks to meet Basel III capital requirements earlier than the Basel Committee’s schedule, and at a higher standard. Market reaction to this announcement has been positive because Singapore-incorporated banks are well-capitalised and in a strong position to meet MAS’ revised requirements. These requirements will help keep our banking system strong and safeguard our financial stability. Likewise for liquidity. Singapore was one of earliest jurisdictions to require banks to maintain minimum liquidity levels. Over the years, this has evolved to a risk-based liquidity risk supervision framework. Singapore banks are therefore well positioned to meet the new Basel liquidity ratios. Effective regulation is not just about setting high standards. It is also about creating market conditions that enable financial institutions to meet the standards. Take for instance the higher liquidity requirements under Basel III. MAS has taken steps to increase the availability of liquid assets in the market and collaborate with other central banks to expand eligible collateral in the MAS Standing Facility. Let me elaborate. BIS central bankers’ speeches  3  We started issuing one-month MAS Bills in April this year. This has added about $ billion of high quality liquid assets for financial institutions. We have seen good interest in the Bills.
The Second Financial Sector Master Plan and the First Capital Market Master Plan have already been announced. The Government is working on tax reforms and a few infrastructure projects have been decided upon, some of which already launched. Although at an early stage, and it may take some time before these tasks of longer-term nature will start to bear fruits, I believe that Thailand is set on the right course of economic progress. Indeed, the private sector continues to see favorable investment opportunities in Thailand. Despite current uncertainties, the expected Business Sentiment Index (BSI) has improved in recent months, boding well for further investment going forward. Our discussions with several domestic and foreign chambers of commerce also confirmed similar positive sentiment and confidence in Thailand’s strength by long-term investors. This positive opinion has also been evidenced by a stable level of BOI investment privilege applications similar to last year’s. For our part, the Bank of Thailand has recently amended our regulations (effective June 11, 2010) to allow multinational corporations to set up treasury-center operations to facilitate more efficient financing flows in Thai baht and foreign currencies. To conclude my remark today, I would like to reiterate that, with resilient economic fundamentals, the prospect of the Thai economy remains robust in the medium term. I believe that going forward gradual policy normalization of fiscal and monetary policies will enhance our economic resiliency and provide more policy space for the future.

Evidently the supervisor’s aim must be to ensure that the banking sector is a fortress against the storm and not an added problem that we have to face at the worst time imaginable. 1  Recently, it has been frequently said that the banking sector is in much better shape than it was before the previous crisis. This will allow it to become part of the solution. In any event, crises are, by definition, periods of transition and COVID-19, despite its specific features, will be no exception. I believe this crisis will serve as a catalyst which will speed up many of the trends that we have already seen and discussed on many occasions at our meetings. First, as regards the importance of digitalisation. Second, in respect of the need to gain in efficiency and cut costs. Also, naturally, as regards the criticality of good governance and risk control, underpinned by the best international practices which will allow institutions to react appropriately to such changing circumstances. And, above all, regarding having a sound and sustainable business model for the medium and long term. We do not know what the future holds for us, but what we do know is that the better prepared we are, the better we will fare. Before I conclude, let me apologise for not having made the most of this address to introduce a supervisory “wedge”.
Zdeněk Tůma: Forecasting and its role as an information source in the decision-making of the central bank Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Forecasting Dinner 2005, Czech National Bank, Prague, 18 February 2005. *  *  *  Ladies and gentlemen, Last year when I was speaking on the occasion of the Forecasting Dinner, I discussed several points connected with the forecasting processes at central banks and at the CNB in particular. Tonight I shall talk about some aspects of uncertainty in forecasting and in particular about the role market forecasts can play as an information source in the decision-making of the central bank. The essential question I have in mind is to what extent should the central bank follow market forecasters’ expectations about the future development of the economy. In other words, should the central bank, in order to achieve its target, follow the market’s expectations or can it surprise the market from time to time? To your common knowledge, the CNB nowadays operates under the inflation targeting regime, which is a monetary policy regime that considers the forecasting process to be the heart of monetary policy decision-making. Although the forecasting process pays main attention to the future development of prices, this does not necessarily mean that central bankers are obsessed with inflation. In fact, inflation targeting requires us to look for and use a broad range of information, including market expectations.

On the other hand, since the inflation forecast is not only an important internal decision-making tool, but also a crucial communication device, market participants have a good knowledge of the central bank’s forecast and can compare their own view on the economy with the central bank’s one. This implies that both the central bank and the market are well informed about each other’s forecast. It is clear that a huge portion of uncertainty is inherent to any practical forecasting. Moreover, from the monetary policy perspective this uncertainty is complicated by the fact that the results of today’s monetary policy action will be effective with a significant lag. On top of that, from the economic theory we know not only that today’s monetary policy decision is important, but also that the expectation about future monetary policy has an important impact. With a certain degree of simplification we can state that in general any future value of inflation depends on three main factors. These are the current state of the economy and its underlying inflationary pressures, current and future monetary policy actions and, of course, future economic shocks. Consequently, the surrounding uncertainty can also be divided into similar parts. Let me first shortly address the last point, something we can call the “shocks” uncertainty. It is necessary to admit that both today’s central bank forecast and today’s central bankers’ decision are deterministic from this point of view.
The Federal Reserve believes that the goals of agency action and legislative change should be (1) to ensure that supervisory agencies have access to high-quality and timely data that are organized and standardized so as to enhance their regulatory missions, and (2) to make such data available in appropriately usable form to other government agencies and private analysts so that they can conduct their own analyses and raise their own concerns about financial trends and developments. In my testimony this morning I will first review the data collection and analysis activities of the Federal Reserve that are relevant to systemic risk monitoring and explain why we believe additional data should be collected by regulatory authorities with responsibility for financial stability. Next I will set forth some principles that we believe should guide efforts to achieve the two goals I have just noted. Finally, I will describe current impediments to these goals and suggest some factors for the Congress to consider as it evaluates potential legislation to improve the monitoring and containment of systemic risk. 12  BIS Review 16/2010  The Federal Reserve and macro-prudential supervision The Federal Reserve has considerable experience in data collection and reporting in connection with its regulation and supervision of financial institutions, monetary policy deliberations, and lender-of-last-resort responsibilities. The Federal Reserve has made large investments in quantitative and qualitative analysis of the U.S. economy, financial markets, and financial institutions.

Accordingly, it will set the ground for a sound and sustainable increase in investments, production, and employment. Dear shareholders, In the upcoming period, implementing the reforms set out in the Economic Reform Package announced by our Government will be crucial to reinforcing confidence and stability and thus, to achieving both a permanent fall in inflation and sustainable growth. On the other hand, like before, we will continue to use our communication channels actively to enhance the effectiveness of our policies and get the views and suggestions of our stakeholders. In line with the transparency and predictability principles, we will share our decisions with the public. As I end my speech, I would like to thank you all for your participation.
Regarding the concept of compound interest, however, the percentage is very close to the average observed in the OECD countries (46%) and in the EU members (44%). Nonetheless, this should serve as no consolation, since this average means that over half the interviewees do not understand a basic financial concept such as compound interest rates. The need to reinforce the general public’s financial literacy is also patent in some of the results on knowledge, holding, acquisition and use of financial products. Firstly, as far as knowledge of financial products is concerned, the Survey asks interviewees whether they have heard of the following products: (i) savings accounts, pension schemes, investment funds, shares and fixed income (all savings vehicles); (ii) life insurance and medical insurance; (iii) means of payment such as credit cards; and (iv) debt products such as mortgages and personal loans. It can be concluded from the results that there is less knowledge of savings products than of debt or insurance products. Shares and pension schemes are well known (around 90% have heard of them), but only 73% of interviewees have heard of savings accounts and term deposits and only 78% of fixed income, while the percentage of those who have heard of life and medical insurance, credit cards, mortgages and personal loans is, in all instances, higher than or equal to 95%.

In addition, and perhaps most importantly, the capital requirements have now become much more forward-looking. Each year a bank’s capital dividend and share-repurchase plan is assessed against the amount of capital the bank would potentially have under an extremely stressed economic and market environment given its portfolio of assets. The annual Comprehensive Capital and Analysis Review (CCAR) process has pushed U.S. banks to improve their capital planning processes and forced them, when needed, to retain more earnings and to build up their capital. As a result, these banks are much less risky now than they were prior to the financial crisis, when their vulnerability was masked by a high, but unsustainable, level of profitability. 1/3  BIS central bankers' speeches  On the liquidity side, there has also been significant improvement. The Liquidity Coverage Ratio and the Net Stable Funding Ratio requirements have forced banks to hold more high-quality liquid assets and have reduced the scope for maturity transformation. The ability and willingness of banks to finance illiquid, hard-to-value assets with short-term funding was an important element that contributed to the financial crisis. In addition, I believe that supervisory oversight has improved. There is more attention on horizontal evaluations across the systemically important firms and a greater emphasis on bank governance, risk management, cyber security, and bank data and technology capabilities than in the past. But the progress has not just been in terms of enhancing the strength of individual institutions. The system as a whole is also stronger because of a number of important initiatives.
More formally, the expected return can be written as the sum of the risk free rate and a companyspecific risk premium for company j:18 (3)  The actual return on an investment is the sum of the capital gain and the dividend yield: (4)  Assuming an efficient market, actual returns differ only from expected returns due to a forecast error which is uncorrelated with expected returns.19 Using this assumption, we can substitute (4) into (3) to give an equation for the equity price. 17  The return is $ – $ = $ divided by the cost of investment. 18  This is the case with the capital asset pricing model (CAPM) (Lintner (1965), Sharpe (1964)) and arbitrage pricing theory (Ross (1976)). Under the CAPM, for example, the company specific risk premium is equal to the company specific beta multiplied by the market risk premium  . This means  . 19  That is, we assume that  BIS central bankers’ speeches  . 5  (5)  So the price of the security is simply the expected price and dividend in the next period, discounted by the sum of the risk-free rate and the company-specific risk premium.

These projects are often felt to yield the highest long-term (private and social) returns and hence offer the biggest boost to future growth. That makes short-termism a public policy issue. But what would be an appropriate public policy response to this capital market failure? A number of proposals have been suggested by various authors. These include: (a)  Transparency: The lightest touch approach would be to require greater disclosures by financial and non-financial firms of their long-term intentions – for example, their long-term performance, strategy and compensation practices.26 For financial firms, this might include metrics of portfolio churn. This could be accompanied by a programme of educating managers, investors and advisors of their fiduciary responsibilities. (b)  Governance: A more intensive approach would involve acting directly on shareholder incentives through their voting rights. For example, fiduciary duties could be expanded to recognise explicitly long-term objectives.27 More concretely, shareholder rights could be enhanced for long-term investors, perhaps with a duration-dependent sliding scale of voting rights.28  (c)  Contract Design: There have been various attempts over the past few years to make compensation contracts more sensitive to long-term performance and risk. This includes employment contracts conditioned on long-term performance, or with deferral or clawback.