samchain/econo-pairs-v1 huggingface dataset:
5/16  BIS - Central bankers' speeches  For example, if MAS wanted to hedge against such negative currency translation effects, we would have to sell US Dollars from the OFR and buy Singapore Dollars. That would negate our interventions in the foreign exchange market to implement monetary policy and cause the Singapore Dollar to appreciate much more, thereby harming the economy and, not to mention, depleting the OFR. The remaining 30% of the loss, or $ billion, was due to net interest expenses from MAS' money market operations to mop up excess liquidity in the banking system. Money market operations are part and parcel of MAS' monetary policy function. Like most central banks, MAS carries out money market operations to manage the level of liquidity in the banking system. In Singapore, money market operations are also a complement to our foreign exchange intervention operations. In general, there are strong appreciation pressures on the trade-weighted Singapore Dollar due to heavy capital inflows. MAS has to periodically intervene in the foreign exchange market by selling Singapore Dollars and buying US Dollars to dampen these pressures and keep the trade-weighted exchange rate within the policy band. When MAS does this, it accumulates OFR and injects Singapore Dollar liquidity into the banking system. MAS then conducts money market operations to withdraw any excess liquidity. There are a variety of money market instruments MAS uses to withdraw liquidity but they all incur an interest cost.

But before I get into the details, let me say that I believe the LTCM episode and the supervisory response to it is fundamentally about two things: leverage and good judgment. Leverage is a fact of life in our financial world, and is a key part of the risk-taking necessary for the creation of wealth. But sometimes banks go too far in extending credit to their customers and counterparties. That’ s where good judgment comes in. I know - - I’ ve been there. I was a commercial banker for 22 years before becoming President of the New York Fed, and I can tell you that the most important decisions a banker makes are how to lend and to whom. Those decisions are not easy, and often involve many shades of gray. One of our aims as supervisors should be to see that banks are using the right tools to make those judgments. The importance of these issues extends beyond banks and their supervisors. Sound credit policies and procedures are essential not only for the stability of individual banks, but also – and more importantly – for the health of the financial system and the economy as a whole. This is because banks play a pivotal role in our economy as providers of credit. If banks make poor credit decisions with respect to a borrower, including a hedge fund like LTCM, the financial system and our economy will suffer.
In this timeline of measures to preserve monetary stability since 1800, 1848 marks a turning point because, with the opening of branches in Bordeaux and eight other French cities, the Banque de France became the central bank for the entire country, for three reasons: First, it unified local payment systems by creating a single nationwide multilateral settlement system through its branch network. Banknotes then circulated over all the French territory with the same value, and the ability to transfer money between branches slashed and standardised the cost of wire transfers for economic agents. Second, it could perform in each financial centre a single supervision of what was essentially local banking businesses, greatly lessening the financial instability that had plagued France off-and-on between the fall of the Empire and the Revolution of 1848.7 Harnessing its in-depth knowledge of business and banking communities, which was shared between each branch and the head office, the Bank was able to implement prompt corrective actions or step in to ensure the recovery or resolution of struggling financial institutions. Faure, Edgar, 1977, La Banqueroute de Law, 17 juillet 1720, Paris, Gallimard “Trente journées qui ont fait la France” for a complete description of the Law system, and Courtois, 1875, previously cited, on attempts to set up a central bank before the Banque de France. 6 Sargent, Thomas and François R. Velde, 1995, Macroeconomic Features of the French Revolution, Journal of Political Economy, Vol. 103, pp.

Ardian Fullani: Monetary & financial stability policies – lessons from the crisis Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 8th International Conference of the Bank of Albania: "Monetary & Financial Stability Policies – Lessons from the Crisis", Tirana, 17 September 2009. *  *  *  Honourable Mr. Prime Minister, Dear Governors, Distinguished guests, I feel deeply privileged to open the proceedings of the 8th International Conference of the Bank of Albania entitled: “Monetary & Financial Stability Policies – Lessons from the Crisis”. I hope the proceedings will help the participants better realize the issues facing the global economy during this period and draw the proper lessons. I am personally convinced that the prominent speakers’ reputation is a guarantee in this regard. Before I invite the guests to discuss the features and lessons drawn from the global and regional crisis according to their viewpoints and experiences, allow me to say a few words on this conference. The topic chosen to be dealt with in this conference is at the forefront of the institutions’ agenda, responsible for macroeconomic policies and financial system surveillance at a national and international level. The panic that followed the Lehman Brothers’ failure almost a year ago transformed the turmoil in the U.S. mortgage loan market into a genuine globalwide financial crisis.
(A) The digitalisation of finance is prospering thanks to cutting-edge technologies (big data analytics, cloud computing, artificial intelligence and blockchain) that beyond the promise of better consumer experiences is lowering the entry barriers to the financial sector for new players, the tech firms, and make it possible to unbundle financial services into an array of distinct core functions such as channelling payments and money, providing financing, sharing risk, and allocating capital. Balance-sheet-light payment services have so far been the main gateway to the financial sector for tech firms, but after doing so tech firms may then expand their business further along the value chain, from payment to retail and commercial banking, wealth management and insurance. Among these tech firms, the Fintechs and the Bigtechs will have a different impact on financial intermediation. Fintech startups have already been a game changer in the financial sector: they have imported from the internet industry a customer-centric culture into the financial sector and they have targeted and called into question many of the long-standing financial rents. However, Fintech start-ups do not have the capital resources to disrupt incumbent banks and their future role is likely to be shaped by two main alternatives: to be acquired by an incumbent bank or to compete on niche segments such as equity crowdfunding or market place lending. It could be different with Bigtechs. The market capitalisation of the GAFA companies Google, Amazon, Facebook, Apple- is 25 times higher than that of the whole Fintech 3/9  universe.

The Deutsche Bundesbank and the rest of today’s Eurozone members (the former Exchange Rate Mechanism members) may serve as a useful example. By imposing the uncovered interest rate parity predicts that the pegging central bank either follows the interest rate policy of the leading central bank or faces significant pressure on its exchange rate. Well, this is exactly what happened, for instance, in the 1980s when the Banque de France tried to lower its interest rate below that of the Deutsche Bundesbank, and again at the beginning of the 1990s when the Bank of England and Banca d’Italia did not want to follow the policy tightening of the Deutsche Bundesbank. In both cases the opening of a negative interest rate differential created depreciation pressures on the exchange rate. As you may well know, the British pound and Italia lira were subsequently forced to abandon the Exchange Rate Mechanism. The existence of exchange rate crises and speculative attacks thus serves as clear empirical evidence in favour of the uncovered interest rate parity. In addition, recent empirical studies based on advanced econometric techniques and using intraday data have shown that when the historical data are used properly the result may support the uncovered interest rate parity concept. The exchange rate plays a crucial role for the Czech economy as well and is therefore an important part of our forecasting devices. And yes, the core forecasting model we use relies on the uncovered interest rate parity equation.
Continued low repo rate stimulates the Swedish economy We Executive Board members assessed that the repo rate needs to remain low to support economic activity and to ensure inflation rises towards the target. We therefore decided at the meeting in July to hold the repo rate unchanged at 1 per cent, and the repo-rate path shows a slow increase beginning during the second half of 2014. Monetary policy is thus very expansionary. However, the decision to hold the repo rate unchanged also gives consideration to the risks linked to Swedish households’ high debts. Personally, I consider the repo-rate decision to comprise a reasonable balance. The forecast showed that CPIF inflation will attain the target in around two years’ time. An even lower repo rate could have led to inflation attaining the target slightly earlier, but the decision is about stepping on the gas just enough. A lower repo rate would probably also lead to the risks linked to household debt increasing further, particularly bearing in mind that the situation for households was relatively favourable to start with. There could be a particularly difficult situation if households expect the low interest rate to persist. This could lead to both house prices and debts increasing further, which can have very negative consequences in the form of sharply rising unemployment and difficulties in attaining the inflation target further ahead. There are numerous discussions in Sweden and abroad with regard to how much consideration monetary policy should give to various types of financial imbalance, such as high household debt.

Low but gradually rising inflation Inflation in Sweden has been low for a long period of time and we devoted extra space to this fact in the July report.1 It is not so strange that inflation has been low, given the Swedish economy’s dependence on global economic activity. One of the main reasons is that prices of Swedish import goods have been low. This is largely due to global economic activity being weak and having affected global export prices, but the stronger Swedish krona has also  1  A more detailed analysis of the development of inflation is included in the article “The development of costs and inflation” in the Riksbank’s Monetary Policy Report published in July 2013. 2  BIS central bankers’ speeches  contributed. Another reason is that companies have not raised their prices to the same extent as their costs have increased. The low price mark-ups are partly due to demand being lower than normal and to the considerable uncertainty over international developments. In July we assessed that inflationary pressures would gradually increase over the coming years, as Sweden and other countries recover. This means that CPIF inflation is expected to reach 2 per cent in 2015. CPI inflation is expected to be higher than the target of 2 per cent at the end of the forecast period, which is due to mortgage rates rising when the repo rate starts to increase as the economy improves. Let me describe in more detail the factors expected to contribute to the upturn in inflation.
Christian Noyer: Challenges facing France’s Prudential Supervisory Authority Speech by Mr Christian Noyer, Governor of the Bank of France, President of the Prudential Supervisory Authority (Autorité de contrôle prudentiel) and Chairman of the Board of Directors of the Bank for International Settlements, at the press conference of the publication of the Annual Report 2011 of the Prudential Supervisory Authority, Paris, 14 May 2012. *  *  *  Ladies and gentlemen, Let me say first of all how pleased I am to host this press conference which has been organised to coincide with the publication of this second annual report of the Autorité de contrôle prudentiel (ACP). The “newness” of this institution, which was officially set up in 2010, has no doubt contributed to the dynamism that it has shown during this crisis period. Independent, but operating under the aegis of the Banque de France, the ACP has acted efficiently and quickly to ensure financial stability and enhance the protection of customers and clients of banks and insurance companies. It has also effectively projected France’s voice in international negotiations concerning its domains of competence. Before saying a few words about the challenges facing the Authority in 2012, I would like to develop two points that in my view best characterise 2011: the solidity of our financial system in a period of severe crisis on the one hand, and the evolution of our prudential supervision methods and instruments on the other.

During the year, the ACP thus developed a more cross-functional mode of operating, thereby responding to the intention that led the Government to merge the former authorities in 2010. The ACP’s College has set out priorities for the supervision of each of the two sectors in a coordinated manner, and the ACP has set up an autonomous and cross-functional research directorate. On the other hand, in line with international and European initiatives, the ACP’s supervisory methods are complemented by the “stress test” approach to ever more complex scenarios and by the monitoring of the systemic nature of certain institutions. Organised by the European authorities (the EBA for banks and the EIOPA for insurance companies) and the Basel Committee respectively and implemented concretely in France by the ACP, these approaches supplement the individual supervision of banks and facilitate the macroprudential supervision of the financial system. The ACP’s supervision methods have also fully taken on board its remit with respect to consumer protection, which is an essential condition for maintaining consumer confidence in the French financial sector. The ACP’s mandate is to promote, in coordination with the AMF – the report of our joint unit will be presented to you shortly – the sound conduct of market players’ commercial practices  2  BIS central bankers’ speeches  without hampering responsible financial innovation that is suited to each category of customers. In 2011, the ACP thus took a whole range of measures, of which I will only mention the main ones.
The depreciated global demand, reflected through several channels, with a decrease in the national economy and real decrease in the GDP in the first half of the year of 1.2%. BIS Review 127/2009  3  Also the pressures on the inflation caused by the import prices decreased, which together with the entering into the zone of a negative production gap, resulted in price stabilization. The average annual inflation rate in the first eight months of 2009 is negative and it equals – 0.3%, which is a significant downward movement, compared to the preceding year. Alike the pressures on the foreign exchange market caused by the indirect effect of the global crisis, transmitted through the movements in the balance of payments, no movements typical for the global money markets characteristic for the past two years on the Money Market in the Republic of Macedonia were registered. Namely, on the Money Market, in the segment of the non-collateralized borrowing, increase in the turnover and stable movements of the interest rate in the last two years were registered, proving that the mutual confidence in the banking system of the Republic of Macedonia was not impaired. Thus in 2007 exactly, when the global financial crisis began in August, the turnover registered on the Money Market in the Republic of Macedonia started to increase, with the average monthly turnover reaching the level of Denar 1,712 million and it was higher by twice relative to the average monthly turnover registered in the preceding year.

Add to this the discussion in the United States to prevent fiscal adjustments from being triggered in 2013. If attempts to reach agreements are unsuccessful, this economy’s GDP growth could fall significantly and tensions could increase in financial markets. In the emerging world, the biggest risk is a deepening of signs of economic slowdown. On aggregate, the world growth forecast does not divert from the average of the past 15 to 20 years, but this has been sustained by the expansion of the larger emerging economies. Particularly preoccupying is the performance of China, due to its weight in the world economy and its relevance in the evolution of the prices of copper. Should it post a sharper deceleration, global growth would weaken further, with intensified effects on commodity exporting economies like Chile, which are still growing at high rates. Another possibility is for supply-side factors to intensify recent increases in the prices of some commodities, especially fuels and grains. Locally, medium-term inflationary risks are still present. The recent trajectory of the world prices of fuels and some foodstuffs could rapidly pass through to inflation, all the more so considering the current state of output gaps. In addition, if domestic output and demand remain as dynamic even or more so, they can further intensify the usage of installed capacity pressuring inflation away from the target. At the same time, this could also could result in a widening of the current account deficit that could create vulnerability factors in the economy in a complex global environment.
Rising affluence and a strong savings culture, coupled with increasing financial sophistication, will mean more Asians moving away from speculation in property and stocks, towards more systematic planning for wealth enhancement through a globally diversified portfolio of assets. 34. There are now more high net worth individuals in the Asia Pacific than in Europe. And they are younger – 41% of the high net worth individuals in the Asia Pacific are aged 45 years and below, compared to only 10% in North America. They have a longer time span for wealth accumulation, and a more global outlook in their investment strategies. At the same time, Asians are living longer and more Asian countries are seeing the need for welldesigned pension systems to provide adequate retirement incomes for their people. These pension funds will require professional management. 35. In the same vein, I expect the demand from the official sector for Asian financial assets to grow. Central banks and sovereign wealth funds will likely look to allocate more funds to Asian markets, both to diversify risk and to enhance returns. Speaking for the MAS, we have always invested our official foreign reserves in a highly diversified global portfolio. As Asian markets develop in depth and sophistication, our allocation to emerging markets, especially in Asia, will grow. 36. To be sure, asset management in Asia is not a one-way bet. Asian markets are more fragmented and harder to operate in, compared to the advanced economies.

We’ll continue to be transparent about our thinking about the economy and monetary policy. But, changing circumstances call for some changes in how the FOMC communicates its policy views. Now that interest rates are well away from zero and the economy is humming along, the case for strong forward guidance about future policy actions is becoming less compelling. For one, the future direction of policy will no longer be as clear as it was during the past few years. When interest rates were extremely low, it was obvious that the direction for rates was upward, toward more normal levels, and our forward guidance reinforced that point. At some point in the future, it will no longer be clear whether interest rates need to go up or down, and explicit forward guidance about the future path of policy will no longer be appropriate. In addition, as we have moved far away from near-zero interest rates, it makes sense to shift away from a focus on normalizing the stance of monetary policy relative to some benchmark “neutral” interest rate, often referred to as “r-star.” Now, I have spent a good deal of my career studying r-star and I find it to be a useful concept for describing the economy’s longer-run behavior. Having said that, at times r-star has actually gotten too much attention in commentary about Fed policy. Back when interest rates were well below neutral, r-star appropriately acted as a pole star for navigation.
This may sound obvious, but let us play with the idea that we didn’t publish our forecasts, as not all central banks do so. Then it would not have been possible to evaluate and discuss our forecasts or the basis for our decisions. In other words, openness is a necessary condition for a worthwhile debate on monetary policy. Until fairly recently, the Riksbank’s inflation forecasts were based on an assumption that the repo rate would remain constant throughout the forecast period. The inflation forecasts are now instead based on an assumption that the repo rate will develop in line with expectations in the financial markets 3 . The interest rate assumptions on which the forecasts are based thus become more realistic. It has also made it easier for us to relate to the entire interest rate path when communicating monetary policy rather than keeping to the most recent decision. This is a step towards greater openness. It is important that the Riksbank should say how inflation should be brought back to the target. In the debate on monetary policy it is good to have greater focus on interest rate policy in the slightly longer term rather than on the current interest rate decision. This leads to a better discussion of the considerations with which monetary policy is normally faced.

A new liquidity regulation is currently in the test and calibration phase. This regulation takes into account all balance-sheet and off-balance-sheet items that are of relevance in liquidity considerations, and is based – as far as possible – on internal bank liquidity management principles. It makes the big banks more resilient to disturbances in the interbank market or larger-scale withdrawals of deposits. It promotes longer-term financing as well as higher-rated securities that are capable of generating liquidity even in a stressed market environment. The new regulation is due to come into force in the second quarter of 2010. These advances and the broad consensus achieved at the international level can certainly be regarded as positive achievements. However, so far they only apply to preventative measures. As mentioned previously, these measures serve to reduce the probability of a crisis, but cannot always prevent its occurrence. Another crisis is inevitable and we must be prepared for it. 3. Resolution measures needed; “too big to fail” is biggest challenge  Consequently, we need tools that will substantially reduce the costs of a crisis. The legacy of the current crisis is a banking system with large international institutions that now enjoy a virtual state guarantee. The fact that systemically important banks enjoy such a guarantee is now openly recognised to be a problem by the banking sector, too. A guarantee of this kind contradicts the basic principle of the market economy and presents us with a situation that cannot be tolerated.