samchain/econo-pairs-v1 huggingface dataset:
Specifically, the ASEAN Roadmap on Capital Account Liberalization, launched in 2003, aims to gradually achieve a freer flow of capital over the medium-term. Malaysia has since progressively further liberalised its rules for foreign exchange transactions culminating in the removal of most of the rules in April 2005. Strengthened regional financial cooperation During the 1997/1998 crisis, Asia did not come together to collaboratively and cumulatively act to contain the crisis and subsequently to facilitate its resolution. Perhaps, it was due to the nature of the crisis, its severity on the financial markets and the economies. Domestic stability had to be first restored before time could be taken to formulate a holistic crisis management solution. The instability in the currency markets lasted for about one and a half years. There was also no entity in the region during that period that provided any authoritative assessment on whether the programmes that were subsequently being implemented would in fact produce the desired outcomes. While efforts to strengthen the domestic economies and the financial systems will continue, this has now being reinforced by the improved regional surveillance including on cross border financial flows, and by institutional arrangements that would contribute towards crisis containment and management. The regional cooperative efforts going forward will continue to gain momentum. These efforts should not be seen as attempting to substitute but rather as efforts to complement the existing international arrangements.

The fact is that policy has to be made in ignorance of how the future will turn out, and one has to weigh certain near-term costs against uncertain longer-term gains. Moreover, it seems unlikely that higher interest rates in this country alone would have prevented us experiencing a severe recession. Events in the United States would have proceeded in much the same way, regardless of what the MPC chose to do. And, as we have seen, the downturn has been global in nature, not confined to those economies with overblown financial or housing markets. Would it have helped if our target variable had, say, included a measure of asset prices, particularly house prices? There is certainly a good case for including a measure of owneroccupied housing costs in any consumer price measure, as for many households it represents their largest single expenditure. And, depending on the measure used, that could have resulted in higher inflation figures during the years leading up to the crisis. That does not, however, translate directly into a higher level of Bank Rate. Monetary policy affects inflation with a long and somewhat variable lag and there is little the MPC can do to offset unanticipated movements in near-term inflation. Instead, we have to look at inflation prospects two or three years ahead. But it is in the nature of asset prices, including house  6  BIS Review 31/2010  prices, that one can say rather little about their likely direction of movement that far ahead.
That the attainment of the 7% threshold will not be associated with any immediate need to raise Bank Rate is reinforced by recent developments suggesting that UK inflation pressures are more contained. In particular, inflation has fallen from 5% in 2011 back to the target for the first time since 2009. Global inflation is subdued, with both euro area and US consumer price inflation now less than 1%; oil prices have fallen by 4% relative to a year ago; other commodity prices have fallen by more than 10%, and sterling has appreciated by almost 9% since last summer. All of these developments will hold back imported inflation pressures that have to a great extent explained the above-target inflation over the past five years. The Bank’s assessment of how to evolve guidance to changing circumstances will begin in our February Inflation Report. The MPC will consider a range of options to update our guidance, recognising both what we have learned about the behaviour of aggregate supply in the economy as well as the more benign inflation outlook. The MPC has noted that when the time eventually comes to begin to move away from emergency settings of policy, any such move would be gradual. The degree of stimulus will remain exceptional for some time. That should help reassure British business that the path of interest rates will be consistent with a sustained recovery – that is, with escape velocity. This recognises that many of the headwinds holding back the economy will remain for some time yet.

By making it safer and fairer we can put in place the conditions for it to thrive. But whether or not it thrives will rest on the efforts of individuals and organisations to re-establish the system’s reputation for integrity. While regulators will fix the mechanics of benchmarks in markets ranging from LIBOR to FX, only private individuals and institutions can reform the behaviour that has made such changes necessary. Changes to the structure of compensation will better align the incentives of bank staff and their shareholders, but not every risk can be anticipated. Even if such a package could be devised it would not internalise the impact of individual actions on systemic risks, including on trust in the banking system. For the system to operate with integrity, penalties for misconduct cannot be seen as a cost of doing business. Rather, banks must recognise that only exemplary behaviour can confer social licence to global financial capitalism. More fundamentally, integrity cannot be legislated, and it certainly cannot be bought. Only a perspective which takes into account the wider implications of actions can guide proper behaviour. And while regulators can promote competition, end the subsidy enjoyed by institutions that are too big to fail, and determine the appropriate split of remuneration between fixed and variable elements to limit risks to financial stability, only society, not regulators, can determine whether the absolute and relative levels of compensation are acceptable. 3.
This is despite the well-known difficulties in determining the GDP gap.14 I believe that one can make a fairly good assessment of the GDP gap by combining a production function approach with business tendency data and other short-term statistics.15 GDP is a central variable in the forecasting work and the variable that, despite its well-known deficiencies in measuring welfare, is most closely-related to welfare.16 We should also report fan charts with uncertainty bands for the GDP gap and other measures of resource utilisation, in particular unemployment, to illustrate the uncertainty in these measures, too. It is important to make good judgements of resource utilisation at the outset and to endeavour to ensure it is neither too high nor too low in the coming period. This can contribute to stabilising inflation close to the target. Resource utilisation is namely not only a target variable, but also an indicator of future inflation. Figure 10 shows the correlations between some measures of resource utilisation – GDP gap, hours worked gap, labour  13  See the Executive Board’s consultation response to the report “Evaluation of the Riksbank’s monetary policy and work on financial stability 2005–2010” (2010/11:RFR5), Sveriges Riksbank, 30 November 2011. 14  See, for example A. Orphanides, “Monetary Policy Lessons from the Crisis”, Central Bank of Cyprus, 2010. 15  See earlier speeches: S. Öberg, “Monetary policy and the elusive resource utilisation”, 25 May 2009; S. Öberg, “Potential GDP, resource utilisation and monetary policy”, 7 October 2010; and S. Öberg, “GDP growth and resource utilisation”, 6 October 2011.

Conclusion When I look back at monetary policy since the current monetary-policy regime, with a floating exchange rate and an inflation target, was introduced at the beginning of 1993, I think that it has on the whole functioned fairly well. One might possibly think that monetary policy was too tight in 1994–1995 when the Riksbank raised the repo rate at the same time as the budget consolidation work was holding back inflation. However, it was important to bring down inflation and inflation expectations to a much lower level than in the 1970s and 1980s. One might also think that the assumption of an unchanged repo rate that was used as a basis for the forecasts during the first years was too simple. On the other hand, one has to see this more as a part of the communication strategy that was being followed then. And it worked. Inflation expectations fell and have been established close to the target. I also think that monetary policy has worked well during the six years, 2006–2011, that I have been a member of the Riksbank’s Executive Board. CPI and CPIF inflation have on average been 1.7 and 1.8 per cent a year respectively. This is somewhat lower than the inflation target. However, given that the world has undergone the deepest recession since the 1930s during this period, it should nevertheless be regarded as a good result.
Likewise, the proposed targeted harmonisation of insolvency regimes should make it easier to reallocate resources from failing firms and provide more transparency for cross-border investors. Finally, a more efficient and harmonised withholding tax framework will reduce the burden and costs for investors and facilitate cross-border investment. Beyond the current institutional cycle and the CMU action plan, EU legislators should also look at structural issues, such as improving the current architecture to enable more consistent and harmonised supervision of markets. Conclusion The euro area financial system recently passed a real-life stress test. At the same time, the events of this spring underlined the importance of making decisive progress on the European banking union and capital markets union projects. The financial market turbulence and contagion from the United States and Switzerland would have been far more muted had we been closer to our goals. Completing the banking and capital markets union projects will increase cross-border bank lending and enhance the dynamism of public and private equity markets. Both are key to enhancing integration and stability in the euro area financial system, and they will also ensure that the funding for the green and digital transitions is available to meet the challenges ahead. Thank you for your attention. 1. Rose, J. (2023), “Understanding the Speed and Size of Bank Runs in Historical Comparison”, Economic Synopses, No 12. 2. Report from the Commission to the European Parliament and the Council on the Single Supervisory Mechanism established pursuant to Regulation (EU) No 1024/2013 (COM/2023/212 final). 3.

Sabine Lautenschläger: Navigating uncertainty – governance, risk management and leveraged finance Speech by Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the Single Supervisory Mechanism, at the 17th Annual Risk Management Convention by the Global Association of Risk Professionals, New York City, 1 March 2016. *  *  *  Ladies and gentlemen, It is a great pleasure to be here today, as it gives me a welcome opportunity to exchange ideas on risks and risk management with high-ranking risk managers. Discussing topics of risk management is doubtless necessary given the current macroeconomic environment. In 2008, the financial crisis turned the Great Moderation into the Great Recession. Today, almost eight years later, we still live in challenging times. The Great Recession has now turned into the Great Uncertainty. Quite recently, financial markets experienced another flare-up of that uncertainty. Share prices of European banks, for instance, have been extremely volatile. On some days, we saw prices rise or fall in double digits.
It is namely the case that the preliminary works to the Sveriges Riksbank Act emphasise that the monetary policy instruments shall only be used to maintain price stability, and thus not to promote a safe and efficient payment system.3 We sometimes say that monetary policy shall take financial risks into account, as it can be difficult to stabilise inflation around the target if households are forced to rapidly reduce their debts.4 Such difficulties could arise, of course, but for me it is not consideration of the inflation target that mainly justifies letting monetary policy take financial risks into account. Instead I perceive taking financial risks into account to follow on from the task of “supporting the objectives of general economic policy with the aim of achieving sustainable growth”. A monetary policy that leads to an unhealthy build-up of credit or other financial imbalances is scarcely compatible with sustainable growth. But this task, like the task of stabilising economic activity, is subordinate to the inflation target. Monetary policy’s consideration of financial risks must therefore be weighed against the inflation target and economic developments. 1  For a tool to be sufficient to meet the inflation target and attain a balanced development in economic activity, it is necessary for the economy to mostly suffer demand shocks, not supply shocks. This observation is sometimes called the divine coincidence, an expression coined by Blanchard and Gali (2007). 2  See the Riksbank (2013a) p. 3. 3  See Bill 1997/98:40, p. 54. 4  See, for example, the Riksbank (2013b).

With only one tool, the repo rate, we are trying to attain the inflation target and at the same time attain a balanced development in economic activity. In practice, the repo rate is often adequate as a tool to  BIS central bankers’ speeches  3  give both inflation and economic activity a push in the right direction.1 But in recent years, we have also needed to manage the problem of economic activity being at different levels in different parts of the economy. We cannot use the repo rate to stimulate the corporate sector and limit the build-up of household debt all at the same time. In this situation, it is not evident how monetary policy should manage the balance between inflation, economic activity and the risk of an overly rapid increase in housing prices and household credit. Let me elaborate on my thoughts a little further here. Monetary policy must take financial risks into account The concern over lending to households increasing too rapidly has led to a majority of the members of the Riksbank’s Executive Board voting to hold the repo rate at a higher level than would otherwise have been justified. I have entered reservations against these decisions and advocated a lower repo rate, for reasons I will return to later. Despite my reservations, I share the majority’s concern over the rapid increase in household debt.
8  Mar.09 General government Monetary authorities NIIP (2)  Mar.10  Figure 5 Real exchange rates by region (monthly data; index, 2001-2009=100) RER with respect to Asia  RER with respect to Latin America 150 140 130 120 110 100 90 80 70  150 140 130 120 110 100 90 80 70  150 140 130 120 110 100 90 80 70  01 02 03 04 05 06 07 08 09 10  RER with respect to the euro 150 140 130 120 110 100 90 80 70  150 140 130 120 110 100 90 80 70  01 02 03 04 05 06 07 08 09 10  RER with respect to the U.S. 150 140 130 120 110 100 90 80 70  150 140 130 120 110 100 90 80 70  01 02 03 04 05 06 07 08 09 10  Aggregate RER  150 140 130 120 110 100 90 80 70  01 02 03 04 05 06 07 08 09 10  Regional RER  Source: Central Bank of Chile. Figure 6 Real exchange rate by sector (index, 96-07=100) 250  250  200  200  150  150  100  100  50  50  0  96  98  Manufacturing Total exports  00  02  04  06  08  10  0  Agriculture, forestry & fishing Mining  (*) RER estimated using unit-value indexes. Latest date corresponds to third quarter 2010.

Muhammad bin Ibrahim: Of directors and supply of talent Remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launch of FIDE Forum Directors Register “Of Directors and Supply of Talent”, Kuala Lumpur, 1 April 2016. *  *  *  Today marks an important step forward for board talent management among financial institutions in Malaysia. The Directors Register will be launched this morning to address the financial sector’s need for a reliable supply of qualified individuals to meet the growing demand for high-calibre directors. Financial institutions play a critical role in the economy, intermediating funds to support the real economy. Because of the criticality of the role, financial institutions must be led by directors who possess the necessary skills, experience and integrity to spearhead financial institutions in a competent and effective manner. Identifying, developing and retaining directors of high calibre are no easy task. We need to design a solution to achieve it. The Directors Register is therefore a timely initiative as this acts as a solution to expand the pool of potential directors for boards of financial institutions. Demand imperatives Being a director of a financial institution is highly demanding. The last financial crisis has shown the failure of board oversight in managing the affairs of financial institutions. Unbridled risks-taking, misaligned, incentives structures and failures in overall governance were just a few of the shortcomings that almost brought the global financial system to a standstill.
A more diversified financial intermediation model, with new players, Fintechs but above all Bigtechs and Asset Managers, is welcome in that it will bring more sources of financing for the real economy. This nevertheless raises a big issue: they are performing bank-like activities without being regulated in the same way as banks. Beyond unlevel playing field considerations, this situation could have major financial stability implications. 2- Old issues, and new ones that need to be addressed by regulators and supervisors This leads me to my second point. The move from a bank-centric intermediation model toward new unbundled financial intermediation models performed by multiple players does not eliminate the need for central bankers (fortunately!) and regulators. But it does force us to revisit old questions (A) and to address new ones (B). (A) I would like to highlight three of the old issues we must revisit. First, the question of the scope of financial regulation. Just as an example, the use of the public cloud is becoming mainstream for performing core banking operations. Fintechs and Bigtechs have adopted a strategy of “all in”. Incumbents are also migrating, although more cautiously, to the public cloud. However, the cloud computing market is highly concentrated and Amazon Web Services has built a dominant position.

In today’s speech, I want to highlight some of the key features of this highly integrated economic system and discuss some of the challenges it may pose in the future. In particular, I will discuss how the changing shape of the world economy affects the task of national monetary authorities, such as the MPC. In other words, how can economic policy-makers maintain stability when we are constantly in danger of being buffeted by powerful global economic forces? The rise of Asia and the changing shape of the world economy A key feature of the new global economy we now inhabit is the increasing economic strength of the Asia-Pacific region. Chart 2 shows that the top ten economies in this region – led by China, Japan and India – have already overtaken both the European Union and the United States in their share of world economic activity. This compares with the situation thirty years ago when these economies were collectively just half the size of the European economy, and about two-thirds the size of the United States. 2  BIS central bankers’ speeches  Chart 2 – The rise of Asia Percentage share of world GDP, at current market prices and exchange rates US  EU-27  40%  Asia-pacific G10 *  35% 30% 25% 20% 15% 10% 5% 0% 1980  1990  2000  2010  *: Includes Australia, China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan Province of China and Thailand.
Of course, besides the influence of monetary policy, this development of the real economy also reflects structural factors such as the strong resilience of the well-diversified Swiss economy and the flexible labour market. Companies had to make considerable efforts to adapt to the difficult conditions after each appreciation surge, which may have enhanced the flexibility and efficiency of the Swiss economy even further. The increase in the population as a result of immigration made a positive contribution to growth as well. Furthermore, during the pandemic in particular, there was also a rapid and targeted fiscal policy response. II. New constraints The pandemic and the war in Ukraine have fundamentally changed the constraints on central banks. In particular, inflation has risen strongly in many countries over the past year, and uncertainty has also increased markedly in many respects. The SNB, too, is at present confronted with an inflation rate that is significantly above the range we equate with price stability. As in recent years, inflation in Switzerland is currently lower than in many other countries. Besides the strong Swiss franc, the energy mix in Switzerland has thus far also helped to keep inflation comparatively low. Nevertheless, the current level of 3.4% is still the highest inflation our country has seen since the 1990s. Furthermore, there are signs that inflation is increasingly spreading to goods and services that are not directly affected by the pandemic or the war in Ukraine.

Joseph Yam: Competition and cooperation among global and regional financial centres Congratulatory remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the ACI Asia – The Financial Markets Association, Hong Kong, 11 July 2008. *  *  *  Mr Wiebogen, Mr Tan, Ladies and Gentlemen, It is with great pleasure that I join you this evening to mark the inauguration of ACI Asia – The Financial Markets Association. On behalf of the Hong Kong Monetary Authority and the Hong Kong Special Administrative Region Government, I would like first to offer my congratulations to all those who have worked hard over the last couple of months on the establishment of ACI Asia. Special congratulations are also appropriate to Mr Wiebogen and Mr Tan for the foresight and leadership they have demonstrated in this initiative. Financial markets in the developed economies have been experiencing considerable stress. At the risk of oversimplifying it, the current financial turmoil can be attributed to financial innovation creating distortions in the financial system, including the compensation schemes for the innovative lot, to such an extent as to lead to a serious erosion of credit standards. It is at a time like this that everybody should be reminded of the importance of professionalism in finance, at all stages of financial intermediation.