samchain/econo-pairs-v1 huggingface dataset:
What I have suggested so far is that the exchange rate between the two currencies is probably not something which we need worry greatly about in terms of economic impact via competitiveness and trade. Thus Hong Kong ought not to need to take any particular defensive or offsetting action if the renminbi were to move more widely against the US dollar. There is, however, an important qualification to that conclusion. If financial markets believe differently, and react to those beliefs, we may see disturbances in markets as a result of actual or rumoured developments in the Mainland's exchange rate policy. We have indeed already witnessed some such behaviour from time to time when reports have circulated about imminent adjustments to the renminbi. Yet, as on those occasions, so on future ones I would expect our markets to cope satisfactorily with such disturbances – essentially through the currency board's adjustment mechanism whether to upward or downward pressures on the HK dollar exchange rate – and economic fundamentals ultimately to prevail. 2  See "Why blame the peg? ", available on the HKMA website (www.info.gov.hk/hkma/eng/speeches) and forthcoming in HKMA Quarterly Bulletin, May 2002. 3  "Price convergence between Hong Kong and the Mainland", by Jiming Ha; to be available shortly in the HKMA research memorandum series. BIS Review 31/2002  3  Fixing to the renminbi? However, the conclusion that we should not be too agitated about the HK dollar-renminbi exchange rate begs a further question.

Although the Hong Kong arrangement, and in particular the status of our Monetary Authority, is unusual internationally and may possibly be unique when compared to the more typical set-up of a central bank established as a distinct corporate entity, the process of monetary policy may not in practice be greatly different from that in other jurisdictions – with the broad framework being set by the government and with the central bank executing the policy in a transparent and accountable fashion. However, we do not have such a precisely defined framework of autonomy for the central bank as exists in some other jurisdictions, which is sometimes regarded as a necessary formal safeguard to monetary stability. The distinction may be less important under our firmly rule-based currency board system than it might be in other circumstances. Legal parameters Let's turn now to the "what" question. Although, as noted already, the Basic Law clearly states that the Hong Kong government shall determine its own monetary policy, it also sets some very important parameters within which that freedom can be exercised. Thus:"The Hong Kong dollar, as the legal tender in the Hong Kong Special Administrative Region, shall continue to circulate." (Article 111) "No foreign exchange control policies shall be applied in the Hong Kong Special Administrative Region. The Hong Kong dollar shall be freely convertible. …….The Government of the Hong Kong Special Administrative Region shall safeguard the free flow of capital within, into and out of the Region."
How much it will contract is uncertain, however, particularly because investment remains undetermined, largely due to uncertainty about access to foreign credit. The adjustment following the overexpansion of recent years has run its course, for the most part, and in some areas it has overshot the mark. If we include the Central Bank’s forecast for 2010, public expenditure has contracted by nearly one-third since 2007, which is virtually unparalleled in other countries, as other countries did not experience the overheating Iceland did. Iceland’s huge current account deficit has turned to a surplus, excluding calculated interest in the estates of the failed banks, which may not be paid. The plunge in the currency has been arrested, and other things being equal, inflation will fall sharply in the next few months. The latest inflation measurements, published earlier this week, change nothing in this regard, as they were foreseen by the Central Bank, and because the year-on-year rise in inflation is due largely to the drop in the CPI in March 2009. A number of economic variables have now overshot the mark, as often happens when imbalances like those in Iceland correct themselves. The most important of these is the real exchange rate of the króna, which is currently one-third below its historical average and probably considerably below its long-term equilibrium. The real exchange rate will therefore rise in the quarters to come.

I would also like to thank the Minster of Economic Affairs and his Ministry for successful co-operation in recent months. I want to extend my thanks to other Ministries and institutions as well, not least the Financial Supervisory Authority and the Ministry of Finance. Other collaborators, including financial institutions and non-governmental organisations, and the staff of the International Monetary Fund, also deserve thanks for their co-operative efforts. And last – but certainly not least – I would like to thank the employees of the Central Bank for their work. Without them, there would not be much wind in my sails today. And in closing, I wish to say this: Iceland has been faced serious economic difficulties in the recent past, and there are certain dangers ahead. But we have the power to steer clear of them. We could be at the bottom, poised to rise up again and move forward, if we play our cards right. But we must ensure that we avoid turbulent waters and establish long-term stability. In order to do so, we must demonstrate the patience and resilience to allow the recovery of the economy and the financial system to play out. History teaches us that pride goeth before a fall – but it also teaches us that the darkest hour is just before the dawn. Let us bear that in mind as we welcome the spring. BIS Review 39/2010  9
At the same time, I do not favor total discretion in which the monetary policy strategy is determined in an ad hoc fashion as we go along. For monetary policy to be most effective, market participants, households and businesses need to be able to anticipate how the Federal Reserve is likely to respond to evolving conditions. That is because the transmission of monetary policy to the real economy depends not only on what policymakers decide to do today, but also on what the public anticipates that the FOMC is likely to do in the future as the economic outlook changes and evolves. Our experience at the zero lower bound in recent years underscores how important expectations are in influencing the effectiveness of monetary policy. Policymakers thus need to act in a systematic and consistent manner so that expectations are formed accurately and economic behavior can respond consistently with those expectations. In my view, this consideration rules out a totally discretionary monetary policy. Before I critique the use of prescriptive rules in monetary policy-making, I’d like to make it clear at the start that the Taylor Rule (by which I mean the formulation based on John’s 1993 and 1999 papers) has a number of positive attributes that make it a useful reference for policymakers. First, it has two parameters – the long-term inflation objective and the level of potential output – that map directly to the Federal Reserve’s dual mandate objectives.

Subject to the caveat that the equilibrium exchange rate of a currency cannot be estimated very precisely, there is common agreement that the exchange rate of the Maltese lira does not appear to be significantly misaligned and that the reasons for the economy’s slow growth lie elsewhere and should be addressed directly. Indeed, I cannot detect an economic rationale for the sudden attention being given to the exchange rate. The exporting community, the sector most directly concerned, has not to my knowledge made a formal proposal through the FOI. It is also significant that a change in the exchange rate did not feature among the 55 MCESD recommendations for the restoration of competitiveness. Devaluation to improve competitiveness does not work. Unless it is accompanied by a cut in real wages, it serves only to raise inflation. This is borne out by the experience of several countries, including Malta’s after 1992. As for the concept of a “gradual depreciation”, which has not been clearly defined, the nearest instrument known to economic theory is a crawling peg. Since this involves a change in the exchange rate regime, it requires an announcement that the currency will be depreciated at given intervals dictated by movements in some anchor, such as the retail price index. This method creates uncertainty and offers speculators a one-way bet. Experience has indeed shown that crawling peg regimes have often ended in crisis. The lessons of recent economic history should not be ignored.
Thus, my dare to you is to get yourselves financially educated, and from thereon to be financially prepared for your future. Elon Musk, of PayPal, SpaceX and Tesla electric car fame, was once quoted to say that and I quote “It is OK to have all your eggs in one basket,as long as you control what happens to that basket”. Now, obviously Elon Musk is not in the insurance industry. And putting all your eggs in one basket seem to be the anti-thesis of diversification and proper risk management. Nevertheless, as someone known to be a successful serial risk taker, he may be up to something. Think about it. There may be times, especially so during your youth to take exceptional risks, to be bold in new ventures and move out from your comfort zone. But always remember, life does occasionally deal you with its challenges. Contingencies such as illnesses, accidents and personal tragedies can and will challenge you in the future in your pursuits of your dreams. Financial shocks can occur to any of us, at any stage of our lifecycle. In such situations, smart options like insurance and takaful are perhaps the only way to ‘control what happens to your basket’. With all these in mind, we must dare to make that leap in life to be financially protected, for the sake of our loved ones. Moving on to my last dare to our esteemed industry leaders present here today.

I would like to record Bank Negara Malaysia’s appreciation to this bold initiative by LIAM together with academia and the Ministry of Education through the #IDareYouChallenge to educate and increase awareness among the younger generation on the importance of long-term financial planning and insurance. It is an unconventional collaboration between industry and academia, which allows the industry to benefit from new ideas and perspectives, build brand awareness among these university students and indirectly connect to a future talent pipeline. Likewise, universities and the student population benefit by having more of their students exposed to the industry and being prepared for their post-academic career. But my dare is also for the industry should go further in the age of digital disruption, to be at the forefront of innovation and to be an employer of choice for today’s graduates. A survey conducted among students and graduates of Malaysia’s 100 leading graduate employers, only had two insurance companies on the list, compared to a total of 18 banking institutions in Malaysia. Whether this is borne out of reality or lack of outreach, there is a need to promote and to brand the industry with a culture of innovation and a more visible consumer presence including via digital means, from which it will naturally grow into an exciting and engaging place for new generations to build a career in. To the competing teams today, all the very best to all of you. In my mind all of you are winners.
In concert with better risk modeling, securitization and credit derivatives have facilitated the dispersion of credit risk across firms and across sectors of the financial system. These changes have led to significant risk transfers within the banking system, as well as a net transfer of credit risk from commercial banks to other financial intermediaries. As a result, we believe we are seeing a more efficient risk allocation within the financial system as a whole, since risks can be transferred to firms where they will diversify, rather than reinforce, risks arising from core businesses and to parts of the financial system that are significantly less leveraged than banks and securities firms, such as institutional investors and mutual funds. These risk management advances have been accompanied by the growth of key derivatives markets that have lowered the costs of hedging market-price-sensitive positions and activities. One important example of this is the growth of the market for long-dated swaps, which are now used by banks to hedge mortgage securities and whole loans. The notional value of long-dated interest rate derivatives (those with maturities of more than 5 years) has more than tripled since the end of 1998, considerably faster growth than for comparable shorter-dated instruments. The growth of these markets reflects a very substantial increase in hedging capacity, and this “wider pipeline” seems likely to facilitate the ease with which the market adjusts in conditions of stress. Growth in these OTC derivatives markets has been accompanied by welcome improvements in market practice.

At the same time, labour shortages have persisted in many sectors and overt unemployment has been stable and low. The business sector must restructure rapidly when real wages increase sharply. Many activities will no longer be profitable and will be shut down. This could lead to higher unemployment. However, lower employment will not necessarily be reflected in unemployment figures. We may instead see a flow of discouraged workers into, for example, disability pensions, early retirement schemes or different types of adjustment packages. The extent to which these schemes are used will depend on financial incentives and entitlement thresholds. 8  BIS Review 20/2002  In Norway, the employment rate is among the highest in the OECD area. This reflects both high labour force participation and low unemployment. The picture becomes more mixed when average working hours are taken into account. The average is lower in Norway than in other countries. The sickness absence rate is high. Part-time employment is widespread. The average number of person-hours worked in the working-age population is relatively low, despite high labour force participation and low unemployment. Among OECD countries, the only countries with lower figures than Norway are those with very high unemployment. In Norway, average working hours have fallen by more than 20 per cent in the last thirty years. This can be partly explained by the way working life and child care are organised, but similar trends are also seen in many other countries, especially in Scandinavia.
The equity committed by the U.S. Treasury facilitated broad support for large employers.8 The facilities’ combined capacity leveraged Treasury’s committed equity contribution of $ billion by up to 10 times. Third, the support provided by the facilities is broad. Excluding banks, all U.S. domiciled firms with an investment-grade rating prior to the facilities’ announcement were eligible, thus concentrating support for firms that primarily faced liquidity strains due to the pandemic. The facilities also provide support for firms with ratings just below investment grade to mitigate the “cliff effects” at the boundary of our support.9 Together, these programs backstop about 80 percent of corporate bonds outstanding, excluding those issued by banks.10 Finally, policymakers signaled their willingness to adapt. Even before purchases began, the size of the equity injection and purchasing power of the facility was increased, and the scope was broadened to allow support for “fallen angels,” or bonds downgraded below investment grade (but no lower than BB-) after the CCF announcement. Implementation Matters In addition to program design, the principles that guided the implementation of these facilities—access, transparency, and accountability—reinforced their credibility and impact. Providing broad access to the facilities for corporate borrowers was essential, both to expand the reach of backstop support for the economy, and to ensure that the facilities avoid the allocation of credit. Our initial purchases were in a diversified set of ETFs that provide broad exposure to the market for U.S. corporate bonds. Purchasing via ETFs offered efficient and rapid transmission of broad-based support to the secondary market.

One example is that we have clearly communicated that we assume that the repo rate will remain at 0.25 per cent for a fairly long period of time. In our most recent forecast the repo rate remains around this level until autumn 2010. Another measure is that the Riksbank lends money to the banks at longer maturities than normal. The purpose is to contribute to continued lower interest rates on loans to companies and households. As I mentioned when I described the economic situation, we decided at our monetary policy meeting two weeks ago to supplement the low repo rate with such a loan. …and to safeguard financial stability. The measures implemented to safeguard financial stability have similar effects, but the fundamental aim is different. The intention has mainly been to make it easier for the Swedish banks to manage their short-term and medium-term funding. Particularly during the most intense phase of the crisis it was difficult for the banks to borrow other than at very short maturities. It may also be necessary to help financial markets that have suffered serious disruptions to function more smoothly. One can say that the Riksbank has functioned as an intermediary in the bank system – a function that the market does not normally require. One  BIS Review 138/2009  7  example in this area, too, is the loans offered to the banks at longer maturities, in both Swedish kronor and US dollars.
Beyond the single monetary policy, there are various areas of European co-ordination in IMF-related matters although, as is well known, the different European states are represented on an individual basis in the Bretton Woods institutions. Spain, which adhered to the New Arrangements to Borrow (NAB) as from their creation in 1998, is today an IMF creditor country. And though we continue to benefit from the Fund’s excellent technical advice, we also provide technical assistance, in some cases in collaboration with the Fund, to other countries in the process of implementing systems or procedures in which we have a certain comparative advantage. Moreover, the Spanish authorities and, in particular, the Banco de España, co-operate increasingly closely with the Fund on matters relating to national and international financial stability. As I indicated earlier, this issue is becoming more and more important, and the objectives and the interests of the Fund tend to coincide in this connection with those of the competent national authorities. The reasons why national and international authorities pay greater attention to financial stability can be found in the crises a significant number of countries have undergone in recent years. These have highlighted the complex linkages between the real sector and the financial sector and the risk that the latter may not only be a source of instability, but also amplify the imbalances or shocks generated in other sectors of the economy.

Over the next two days the Conference will address these and other matters of interest to us all, among them the risks associated with the persistent imbalances between the current account positions of the main economic areas; the consequences of adopting different exchange rate regimes in the current environment of free capital flows; the problems that arise from excessive public debt levels both in the emerging and industrialised countries; and the role of the Fund in the face of the challenges of economic and financial globalisation. All these issues have interested authorities, the private sector and the academic community for many years, although the way to deal with them has evolved in step with changes in the international economy. In what is an exceedingly dynamic environment, then, it is crucial to identify the root of the problems and possible solutions for them, which is precisely the chief aim of conferences such as this. We have an intense and fascinating agenda for discussion. It highlights, once more, the need for national authorities, international financial institutions and the academic community to work together in areas of common interest, taking advantage of their experience and comparative advantages and with the degree of technical excellence these matters require. I trust that these sessions will shed light on how to improve the functioning of the global economy and, in particular, the international monetary system. Thank you. BIS Review 37/2004  3
That said, an improving path could be seen throughout Q2, in tandem with the ongoing gradual reopening of the economy. At present, then, we are witnessing an incipient recovery in the economy, which, however, is still incomplete, uncertain and uneven. The correlation of this economic activity during Q2 with the intensity of the restrictions on people’s movement in force at each point in time was very high. Thus, some indicators that measure people’s movements hit record lows in the first two weeks of April, with declines of around 80% in motorway traffic and fuel consumption, and of over 90% in the case of airport traffic. This was reflected in the high-frequency indicators of economic activity in the weeks in which the lockdown was stricter; then, for example, we saw reductions in electricity 1  consumption by firms and in consumer spending paid using cards of approximately 30% and 60%, respectively. For April as a whole, there was an unprecedented event in the time series when some variables fell practically to zero. This was the case of new car registrations and international tourist inflows, the latter variable obviously being closely related to the restrictions on personal movement. Since early May, and to a greater extent in June, the progressively staggered and regionbased easing of the lockdown measures prompted a gradual recovery in the mobility indicators and, in tandem, in economic activity indicators.

For this to be the case, however, an individual who is convicted of illegal activities, or who violates a firm’s code of conduct would need to face the risk of being permanently denied employment in the financial industry. Rather than paying for the performance bond upfront, the bond is posted in terms of the privilege to continue to work in the industry. There are several steps that can be taken to implement this concept. The first step is to make it more difficult for employees in finance who cross ethical boundaries to be able to move from one firm to another in order to escape the consequences. Currently, lenders who are considering making a loan to a borrower can look up the borrower’s credit score which reflects the borrower’s performance on past loans. In a similar manner, it would be helpful if financial firms, prior to making a hiring decision, could look up a candidate’s “ethics and compliance score” that reflects the individual’s past performance at other financial firms. Along these lines, one approach would be to create a central registry that tracks the hiring and firing of traders and other financial professionals across the industry. There would be many details to sort out regarding how to do this in a manner that was both transparent and consistent with due process. The database could be maintained by the official sector – specifically, by financial institution supervisors – based on information provided by supervised financial institutions.