samchain/econo-pairs-v1 huggingface dataset:
And the DWF currently offers a 12-month swap option, as well as the standard 30-day facility. In summary, by providing liquidity insurance the Bank aims effectively to give essentially sound banks and others time to address the problems created by stress, and for the authorities to develop remedial plans, without creating perverse incentives or exposing itself to risk. Given those aims, banks must avail themselves of these facilities. We believe, for example, that all qualifying banks and building societies should sign up for the Discount Window Facility; that they should pre-position with us a range of eligible collateral, so that they avoid operational stumbles when they seek to use the Window; that they should use it regularly in meaningful size as part of testing and making a reality of their contingency plans; and that they should share those plans with the Bank, which, amongst other things, would help us assess applications to draw. In that way, the DWF can truly help to underpin the system’s liquidity in the future. 19  See Tucker PMWT (2008), “The Structure of Regulation: Lessons from the Crisis of 2007”, a speech to the LSE’s Financial Markets Group Conference; and the Committee on the Global Financial System, Paper No. 31 (July 2008), “Central bank operations in response to the financial turmoil”, CGFS Papers, Bank for International Settlements. 20  The SLS was introduced in April 2008 and was open until end-January 2009.

A private scheme of that kind would not work, however, if the insurer could not afford to subscribe when the call came; or if investment institutions were unwilling to enter into such commitments on a sufficient scale for the insurance to make a difference to the system’s resilience. Another idea circulating currently 30 is that banks would be required by the authorities to issue hybrid-debt-capital instruments that could be converted when needed into loss-absorbing equity. In one variant, the option to require conversion would lie in the hands of regulators provided a systemic-severity test were passed. Summary and conclusions During the current crisis, the normal functioning of the financial system broke down, with profound effects on credit conditions and on the appropriate monetary policy response. Although I have ranged widely today, I have in fact deliberately not covered the operations employed in some countries to lend directly to firms, effectively by-passing the financial system; or the actions by some central banks, including the Bank of England, to expand the money supply in an environment of near-zero policy rates. Instead, I have focused on the repertoire of instruments directed to supporting, and ideally reviving, the financial system itself: funding liquidity, market liquidity, and solvency.
And from 1997 onwards, VaR came to take a degree of prominence within the regulatory community, with first the US SEC and subsequently the Basel Committee on Banking Supervision (BCBS) giving further impetus to VaR, including through the design and implementation of Basel II. By 2006, when Philippe Jorion published his famous textbook on VaR, relatively few would have disputed the claim in its title – “Value at Risk: The New Benchmark for Managing Financial Risk”. The message was clear: the technological frontier of risk management had been shifted outwards decisively. A cursory search suggests that there have been more than 200 books published on VaR since the October 1987 crash, or roughly one a month. The date of birth of stress-testing is harder to trace. Early mention is made of it in a technical note by RiskMetrics in 1996. But it is clear that stress-testing was given considerable impetus by the failure of LTCM more than a decade after the October 1987 crash. Unlike VaR, which had private sector origins, the official sector appears to have been at least as much a driver behind the adoption of stress-testing. By 2001, under the auspices of its Financial Sector Assessment Programme (FSAP), the IMF was publishing details of its stress-testing methodology and experience. Today, the same cursory search reveals over 250 articles on stress-testing in the past ten years, or more than one a fortnight. We were experiencing a second wave of technological revolution in risk management.

BIS Review 23/2006  1
The level of investment, ten years after the emergence of the crisis, is below the pre-crisis maximum in the EU as a whole, and in the CESEE region as well. Exception is countries such as Macedonia, Poland, and Estonia recently, where investment pattern was different, and the current level is above the pre-crisis one. Chart 3: GDP and demand components, 2008=100 CEE  160.0  160.0  140.0  120.0  120.0  100.0  100.0  80.0  80.0  60.0  60.0  40.0  20.0  20.0  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  40.0  180.0  SEE  140.0  Baltics  180.0 160.0  140.0  140.0  120.0  120.0  100.0  100.0  80.0  80.0  60.0  60.0  40.0  40.0  20.0  20.0  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  160.0  Region  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  180.0  Source: Eurostat and NBRM calculations. At the current juncture, an important question is whether such slow post-crisis investment recovery should be perceived as a natural cyclical adjustment, or are there some structural forces that also play role?

Stock exchanges were established at different points in the transition process: Bulgaria, Hungary, Poland, Russia and Slovenia opened their stock markets in 1990–91; the Czech Republic, Lithuania and the Slovak Republic followed in 1993; Latvia and Romania were next in 1995, followed by Estonia in 1996. Turkey’s stock exchange was established much earlier than those of the transition countries, in early-1986. 9  11  SMEs that are more prone to bank credits), some of the causes are related to supply-side factors. And when discussing the latter group of reasons, commonly four important aspects are highlighted: 1) the role of equity; 2) the role of institutional investors; 3) household preference for bank deposits and 4) regulatory environment. When it comes to equity, a large distance compared to the EU-28 average is visible in the area of financing through local equity market and venture capital availability, with a rank of 90 and 74 (EU-28 average rank is 61 and 55). Yet, concerning the availability of venture capital, some CESEE countries (the Baltics, Czech Republic, Slovakia, Bulgaria, Macedonia) score rather well, reflecting the public support and a favorable regulatory environment. “This is encouraging given the importance of this financing channel for start-ups and innovative companies”.
Condition 2: State Monotonicity:  is non-decreasing in  . Condition 3: Uniform Limit Dominance: There exist and such that (1) for all and and (2) there exists such that for all . Condition 4: Strict Laplacian State Monotonicity: There exists a unique . solving Condition 5: Finite Expectations of Signals: Condition 6: Continuity: and density . is well defined. is continuous with respect to signal  Morris and Shin use these to show be defined by Condition 4. Then for any Lemma 1: (Morris and Shin 2003) Let there exists such that for all , if strategy s survives iterated deletion of strictly dominated strategies, then = {Tight} for all and = {Risky} for all . Proof: See Morris and Shin (2003), Proposition 2.2. 26  BIS Review 168/2010  i.e. that agents play cut-off strategies, adopting strategy = {Tight} when in receipt of a , and adopting strategy = {Risky} when in receipt of a “high’ “low” signal . Condition 4 gives the threshold. signal  BIS Review 168/2010  27  Annex 2 International medium-term frequency cycles in real GDP and credit  28  BIS Review 168/2010  BIS Review 168/2010  29  30  BIS Review 168/2010  BIS Review 168/2010  31  32  BIS Review 168/2010  References Acharya, V.V. (2009), “A Theory of Systemic Risk and Design of Prudential Bank Regulation”,Journal of Financial Stability, Vol 5, 3, 224–255.

Surveillance and penalties  However successful we may be in introducing stronger standards, and incentivising people to follow them, attempted misconduct will still occur. So the Review also wants to consider whether more needs to be done to monitor for, and where it is found punish, misconduct. Firms should be at the frontline of these efforts. Underdeveloped monitoring systems and poor procedures for dealing with internal misconduct undoubtedly played a role in recent years. Though approaches to these issues have since improved, the Review is keen to identify examples of best practice, and ways in which the authorities can catalyse further progress. Questions we raise include the scope for stronger firm-level whistleblowing regimes, the role for electronic surveillance tools, penalties imposed by firms for staff breaching internal guidelines (and ways to publicise such cases), and the extent to which firms can punish poor behaviour by other firms by shifting business and reporting such behaviour to the authorities. Conclusion Let me come to a conclusion. We are slowly emerging from the worst economic crisis in living memory. Much has been done to strengthen the financial system since then: banks hold much more capital, they have more effective liquidity support, major progress has been made on ending Too Big To Fail on the global stage, and in the UK we have transformed the way that we regulate banks and how we set policy to deliver financial stability. But some of the benefits of these advances are being offset by a long tail of outrageous conduct cases.
First, in contrast to the textbook account of shocks to the Money supply via the proverbial helicopter drop of base money (pound notes), firms and households are not caught in a bind where, in aggregate, they are forced to hold the increased supply of broad money, even if it exceeds demand. Following a shock to the supply of credit, in which some people or companies become less credit constrained, it will be open to others to reduce their existing borrowing as the extra money circulates around the economy via the purchase of goods, services and financial assets. Second, and more important, the shocks to credit supply are, in themselves, real not nominal shocks. And like other real shocks, causing changes in the balance of Aggregate Demand and Aggregate Supply, there is a nominal effect only if monetary policy does not respond via alterations to the path of short-term interest rates to keep the economy on a stable path and in line with the inflation target. Absent an appropriate policy response, the easing in monetary conditions would in time feed into inflation through an expansion of nominal spending. In the first instance, the expansion of “liquidity” represented by faster money growth may sometimes work through asset prices. That is because with imperfect substitution between different kinds of financial assets, relative risk premia may be altered, which in turn may affect borrowing conditions in capital markets.

8  BIS Review 149/2007  It cannot be ruled out that, for a while, the M4L growth rate may deceive as to the underlying pace of credit expansion in the economy. That is important because, in a nutshell, the turmoil in financial markets is not just a “City” event. How potent it will be macroeconomically will depend on how long current conditions persist, and the feedback loop between the financial economy and the real economy. As to its persistence, necessary conditions for an alleviation of the current strains in credit markets are probably at least twofold. First, that the US housing and household debt markets stabilise. Second, that banks and other financial intermediaries recognise impairments to asset values, so that uncertainties about counterparty credit risks begin to reduce. On the financial-real economy interaction, we must try to avoid a vicious circle in which tighter liquidity conditions, lower asset values, impaired capital resources, reduced credit supply, and slower aggregate demand feed back on each other. A variety of policy responses are possible. The announcement yesterday by central banks of co-ordinated action via term auctions to alleviate pressure in financing markets is directed at that. Second, regulatory authorities around the world are monitoring banks’ liquidity and capital positions, including in the context of Basel II. And, thirdly, monetary policy also can in principle play a role, through what is effectively a “financial accelerator” working through bank balance sheets, where that is consistent with maintaining stable inflation in the medium term.
This would entail prejudicing, or setting aside, the price-stability target. Without prejudicing the price-stability target, monetary policy cannot aim at a higher level of resource utilisation than the normal level. It is thus a misconception, and unfortunately a common one, that the stipulation to not prejudice the price-stability target means that monetary policy should only aim to stabilise inflation around the inflation target irrespective of what happens to resource utilisation, what is usually referred to as strict inflation targeting. The stipulation means instead that monetary policy should also stabilise resource utilisation, but around a normal level, not a higher level. As far as I can judge there is now general agreement about this interpretation of the provisions of the Sveriges Riksbank Act and its preparatory work. So, at every monetary policy meeting we, that is the members of the Executive Board, have to decide what repo-rate path will best stabilise inflation and resource utilisation. The Riksbank usually expresses this by saying that monetary policy should be well balanced. If there is a conflict between stabilising inflation on the one hand and stabilising resource utilisation on the other, then a well-balanced monetary policy entails a reasonable compromise between the two. Such a conflict is in fact regarded as the normal situation, but a conflict does not always exist. In my view, there is no such conflict at present.

Then, I will address resource utilisation’s significance for monetary policy, give an account of the Riksbank’s calculations of potential GDP, discuss the impact of the financial crisis on potential GDP, give an account of different measures of resource utilisation and what they say about resource utilisation at present, and conclude by addressing the need for continued analyses. GDP grows over time, but the rate of growth varies GDP growth since 1950 is illustrated in Figures 1 and 2. What is known as an HP trend is also included in the figures. I will return to these HP trends later. Seen over the entire period from 1950 to 2010, GDP has increased by an average of 2.7 per cent per year. Growth was significantly stronger in the 1950s and 1960s compared with the 1970s and 1980s. There then followed a ten-year period from the mid-1990s with relatively rapid GDP growth and associated relatively rapid productivity growth. In earlier seminars, we have discussed the reasons for the strong productivity growth during this later period. I myself have pointed out a number of possible explanations.1 Globalisation through the expansion of the EU, the opening up of the economies of eastern Europe and China’s rapidly-growing international trade have increased competition, which has been particularly significant for Sweden, with our substantial foreign trade and high proportion of international companies. Furthermore, a number of product markets were deregulated in the 1990s (taxis, domestic flights, postal services, telecommunications, electricity etc.). Sweden also has high proportions of IT production and IT use in production.
Since the unprecedented sell-offs in May, there have been some recent corrections to the initial overreactions. Nevertheless, capital movements and asset prices continue to be volatile and pose headwinds to growth and financial stability. The summer period provided a brief respite and provided investors with more time to be selective, not treating all EMEs as one single asset class. Economic fundamentals became a primary consideration for assessing in which market to remain invested. We trust that Thailand will continue to receive the attention of foreign investors because of our sound fundamentals and attractive prospects. These, notwithstanding the current soft patches as the economy consolidates and work on its long term competitiveness agenda. Role of monetary and financial policies in safeguarding stability Long before the Subprime and the Eurozone crises, Thailand had our own economic crisis of 1997. We experienced a setback that took us more than half a decade to recover. Since then we learnt the virtue of moderation and prudence. Firms had to deleverage, banks recapitalized, regulatory standards, governance reforms and bank lending practices have improved markedly. The government’s fiscal framework was also strengthened following the fiscalization of the costs of financial sector restructuring. Years of hard work and reform efforts paid off and laid the foundation for a more diversified and competitive economy. The availability of policy space both in the fiscal, monetary and financial policies, helped ensure a much needed domestic source of growth when global trade collapsed in 2008. Timely government stimulus helped shore up domestic demand.

This is a good occasion for our foreign participants to share in the opportunity and prosperity of the region. Foreign investors can participate as co-financing and co-investment partner e.g. through becoming Public-Private Partnership (PPP), Joint venture (JV) or by investing in infrastructure bonds or primary shares. In the area of banking and finance, the country will shortly be welcoming new foreign participants, both as a strategic partner to an established Thai bank, as well as new entrants in the form of subsidiaries. In addition to tackling the infrastructure constraints, the government has articulated an ambitious goal of pushing Thailand towards an innovative economy. The Government raised  BIS central bankers’ speeches  3  the goal of R&D expenditures as share of GDP from 0.2 to 1% by 2016, and moved to establish IT parks. This is still small in comparison to our neighbours such as Singapore and Korea, but is a step in the right direction. The challenge, of course, remains in the implementation and execution phase. Given that our long-term growth strategy hinge largely on the infrastructure and human capital investment which takes time to bear fruit, the urgency to start now is all the more important. Postponing such reforms to a future date may risk running up to a scenario like Europe where the economic engine is being put through a major overhaul and restructuring, at the same time while the plane is still flying through a turbulent storm at 30,000 feet!
But I want to emphasise that such an outcome would not mean that the public finances have been made worse off. The ongoing dynamic effects of the programme will have been to make it cheaper for the Government to issue its debt in the interim. More importantly, over the lifetime of the programme, it would have delivered great benefits to the public purse by stimulating the economy and avoiding deflation: the increase in taxes received as a result of higher nominal GDP should be an order of magnitude larger than any financial deficit on the purchases themselves. To genuinely assess the impact on the taxpayer, one would have to take these and other factors into account. The counterfactual story will never be known precisely but the  13  Speech available at http://www.bankofengland.co.uk/publications/speeches/2010/speech437.pdf. 14  The DMO’s objectives include: “to conduct its market operations, liaising as necessary with regulatory and other bodies, with a view to maintaining orderly and efficient markets and promoting a liquid market for gilts.” See page 31, “Debt and Reserves Management Report, 2010–11”, HMSO, March 2010. BIS Review 135/2010  5  scale of the boost to the economy means that the all-round financial benefits for the public finances should far outweigh any cash deficit that might be left at the end of the programme. The gilt sales programme will not be the only technical issue surrounding an exit from unconventional policies. The Bank is also likely to re-introduce its reserves averaging framework for commercial bank reserves, for example.

This is why part of our vision for 2020 is to support the development of pan-European instant payment services, so that customers can send and receive payments at the same speed with which they can send and receive e-mails. The Euro Retail Payments Board is a multi-stakeholder body which helps foster the development of an integrated, innovative and competitive market for retail payments in euro. This summer it mandated the payments industry to design a scheme for instant payment services by November 2015. The Eurosystem could also consider a possible service expansion in this context, at least on the settlement layer, in order to meet the needs of potential future instant payment providers. TARGET, T2S and SEPA have been important milestones on our journey towards European integration. The Eurosystem’s Vision 2020 will set out the next steps. The actions we take over the coming years will complement the European Commission’s project to establish a Capital Markets Union in Europe – a project which the ECB and the Eurosystem fully support. In fact, T2S and its harmonisation agenda have already laid the groundwork for such a union. With the action plan published at the end of September, the European Commission has transformed its vision into concrete steps. I am confident that through our joint efforts and complementary initiatives we can deepen financial integration and complete the Single Market in Europe in a lasting way. I have briefly outlined a few components of the Eurosystem’s Vision 2020.