samchain/econo-pairs-v1 huggingface dataset:
These transactions all rely on a foreign exchange market that functions with integrity – that is, one that allows a diverse set of buyers and sellers, supported by robust infrastructure, to confidently and effectively transact at prices that reflect available market information and in a manner that conforms to acceptable standards of behavior. In my remarks today, I would like to expand on the essential role that the foreign exchange market plays and examine some of the ways the market’s structure has changed in recent years. Then, amid the backdrop of a number of recent negative developments – specifically, evidence of unethical and illegal behavior by some market participants – I will discuss the critical role that implementation of and adherence to strong global industry standards, including best practices, can play in restoring and maintaining the integrity of the foreign exchange market. In doing so, I will highlight recent and ongoing efforts to help strengthen these standards through the Financial Stability Board and collaborative efforts by major central banks and market participants working within and across jurisdictions, often through local foreign exchange committees. I will conclude by setting an expectation for all market participants in foreign exchange to help support this work in order to reinforce the integrity of, and the public’s trust in, this important market. The importance of the foreign exchange market The foreign exchange market is perhaps the largest, most globally integrated, and most active financial market in the world.

The banking sector liberalization agenda includes discussion on harmonized standards of regulations, which is key criteria for licensing, as well as financial stability arrangement. This will be finalized this year, with timeline of liberalisation in 2014 to 2020, depending on country’s readiness. Capital market integration will also be important to ensure that regional market becomes deeper and wider, to serve growing needs of growing and large investment projects to link up the region’s production and infrastructure. Moreover, it will also help to intermediate capital inflows into the region in a more efficient and stable manner. Regional capital market will also be important for managing the growing pension funds of the region, where some countries are facing growing savings but aging population. It will offer a regional alternative to the currently fragile market in the west. How well prepared is Thailand for this? The banking system already has high degree of foreign participation. Market share of foreign banks and hybrid banks is 20 percent. The foreign banks also accounts for about 50 percent of transactions in OTC derivatives market here. These main players in foreign and hybrid banks include banks from the UK, EU, US, Japan, and China, as well as banks from Singapore and Malaysia. Thus, the banking system and Thai banks are familiar with international competition. Thai banks already have presence in all ASEAN countries, except Brunei. And for this, the AEC will help reduce barriers and enhance business operations of Thai banks abroad.
UK fiscal policy is about to tighten significantly. The average annual reduction in the cyclically-adjusted budget deficit is projected by the OBR to increase from around ½ per cent of GDP over the past two years to around 1 per cent of GDP over the next two – and the IMF expects the UK to undergo the largest fiscal adjustment of any major advanced economy over the next five years. 30 Taken together, these factors suggest that the “equilibrium” real rate of interest – the rate needed to keep the economy operating at potential and inflation on target – which was sharply negative during the crisis, will continue to be lower than on average in the past. It also seems likely that the equilibrium interest rate will move only slowly back up towards historically more “normal” levels. Everything else equal, that suggests a prospective tightening cycle that, once it starts, will be longer and shallower than those of the past. In other words, we expect Bank Rate increases to be gradual, and limited to a level below past averages. What does that actually mean? The Bank of England is around half a millennium younger than Magna Carta. To put the limited and gradual expectation in historical context, short term interest rates have averaged around 4½ per cent since around the Bank’s inception three centuries ago, 31 the same average as during the pre-crisis period when inflation was at target.

12 This set a medieval financial accelerator in train (about 750 years before Ben Bernanke coined the term) 13 by providing an alternative to storing one’s wealth in silver coin (prone to being whisked away by the King). This led to a reduction in the demand for silver money balances. An increase in money velocity would have followed and with it, all else being equal, price inflation until the transactions demand for silver had risen sufficiently to equal its supply. At the very least, the existence of an alternative store of wealth provided an environment in which money velocity could take off, were it to be nudged in that direction. One possible nudge was the anticipation of the re-coinage of 1204. 14 Re-coinages were good for the King because he benefitted from the seigniorage of the re-minting fee. They were bad for cash holders both because of the re-minting fee and because they had to exchange their clipped coins for what they were actually worth, rather than their face value (a medieval haircut – some of which were appalling). Consequently, there was a strong incentive not to be the one holding the old-issue coins when the music stopped. 15 So to sum up: a fiscal squeeze exacerbated by accelerating inflation, combined with monarchical ambition and incompetence to stretch and then break relations with the barons.
Were we to see evidence of second round effects in wage and cost developments, a tighter policy than otherwise might be required. Were energy prices to fall steadily in line with futures rather than stabilise as we assume, then – other things equal – more policy accommodation could be maintained. Exploring how monetary policy decisions and their communication should be managed in the face of such uncertainties is the topic to which I will now turn in the body of my talk. Monetary policy and uncertainty As I hope to have illustrated, the MPC’s assessment and treatment of uncertainty has played an important role in coming to last week’s monetary policy decision. Of course, the current conjuncture has its own specificities – many of which are uncomfortable for the MPC, as I have discussed. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  But dealing with uncertainty is part of the job. If we lived in a world of perfect certainty, then monetary policy would be a much simpler – perhaps even a trivial – task. Sitting on the MPC at present, that is not how it feels. So I hope you will indulge me with scope to discuss more generally how monetary policymakers might deal with risk and uncertainty, before concluding with some more specific remarks about where the MPC stands today. The economic literature on monetary policy and uncertainty is voluminous and surprisingly inconclusive.

Allow me to reiterate and point out that over the years, we delightfully have noticed that the quality in the research work of participants has been on rise, turning the performed analyses and researches increasingly more professional. As in previous years, Albanian students from domestic or foreign universities have applied and presented their best research work. We are happy to notice that participation and interest from students and universities has been significantly edging up, showing appreciation, reliability and reputation of this competition. This year, we received 25 studies, whose common characteristic is the addressing of the reality in the last couple of years. They mainly scrutinise the economic, financial and social effects of the pandemic and the resistance of market and financial institutions to this shock. Thesis on the forward guidance of financial market, focusing on the digital currency effects; exploitation of large detailed databases for evaluating the behaviour of financial market segments which, which have been out of the research attention, are important to the country development; in addition to the study of other important issues to Albania, like fiscal policy, etc. The addressed themes and their findings are based on the application of contemporary research methodologies and make use of granular statistical information, which is both thoughtful and structured one. Above all, this information is employed rigorously pursuant to the academic standards and requirements to research and argue through theoretical and empirical hypothesis on the economic and financial phenomena and events.
As a consequence, even as the recovery strengthened and survey indicators of output growth reached levels previously associated with sharp policy tightenings (Chart 4), market expectations about the future path of policy remained subdued (Chart 3). Participants understood the conditionality of guidance, as they and the MPC learnt that there was still considerable spare capacity in the economy. 8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  Chart 4: Forward market interest rates rose only modestly as unemployment fell towards 7% Data published showing Percent unemployment fell to 6.9% 4.0  August 2013 guidance issued  February 2014 guidance issued  3.5 3.0  Counterfactual path for Bank Rate based on historic correlation with survey indicators of output growth  2.5 2.0 1.5  UK 1 year instantaneous forward OIS rates  1.0 0.5 0.0  Jan. 12  Jul. 12  Jan. 13  Jul. 13  Jan. 14  Jul. 14  The MPC’s second use of guidance responded to another structural development: the sharp fall in the equilibrium real interest rate, or r*. Out of that guidance came the phrase ‘limited and gradual’, so often repeated it is now part of the monetary policy furniture. In fact, it recently celebrated its fifth birthday.

It recommended the introduction of limits on the proportion of new mortgages at high LTI ratios. The momentum in the housing market cooled and the limits have not so far been reached. It is impossible to say how much this was a result of the Committee’s action; a number of other important factors were also in play. But it is an example of the FPC’s approach to adjusting policy to respond to changing risks. And it is also an example of the Committee taking a broad view of financial stability that goes wider than direct risks to the banking system. A further example of how macroprudential risk can develop outside the banking system is the lending and investment that happens through financial markets rather than through banks. To take one example, the global asset management sector has grown by 60% since 2003 and is now a similar size to the global commercial banking system. This will probably be one  2  6  The July 2015 FSR identified the following major risks facing the UK financial system: the global environment notably Greece and China; market liquidity; UK current account deficit; UK housing market; misconduct; and cyber risk. BIS central bankers’ speeches  of the new frontiers of macro (and micro) prudential regulation. The FPC is exploring whether there are significant risks from changes in these markets and in particular how asset managers manage liquidity to meet redemptions in times of stress. There is also work underway on this internationally.
20 The debate often disregards this distributional effect, as macroprudential policy measures are often assumed to be negative for borrowers in the short term, something I will return to later. The macroprudential policy measures in place today patch up the problems that have arisen but very little has been done to manage the fundamental reasons for why the housing market functions poorly. In some areas, regulatory amendments have been made, for example regarding subletting, investment support and permissible noise pollution levels around newly built homes. Essentially, however, no politicians have been willing to address the bigger issues, concerning the rent-setting system, property tax, tax deductions for interest payments and sales taxation of property, for example. The housing stock is not being utilised effectively Let me now develop my reasoning a little over how the housing market and taxation system could be contributing to rising housing prices and increased indebtedness, and thus to increasing risks in the economy. For example, tax deductions for interest payments and low property taxes are contributing towards lower housing costs for homeowners, which is increasing the incentive for households to take on  16 Swedish Trade Union Confederation (LO) (2014). 17  Swedish Union of Tenants (Hyresgästföreningen) (2013). 18 Among other things, Finansinspektionen has introduced a loan-to-value limit of 85 per cent (2010) and amorti-  sation requirements for mortgages (2016), as well as tightening the first amortisation requirement (2018). For a summary, see, for example, Thedéen (2017). 19 Insiders can also be affected if they choose to change their borrowing.

In my view, three main factors have been driving the recovery over the last year – a bounce back in business and consumer confidence, strong growth in Asia and other emerging markets, and the impact of policy stimulus. These three factors will also have a key bearing on future global economic prospects, and I will discuss them briefly in turn. Recovery in confidence A key factor which plunged the world economy into recession was the massive shock to business and consumer confidence across all the major economies of the world when the global financial system appeared to be rocking and reeling in late 2008 and early 2009. Since then, confidence has gradually recovered as the financial system has stabilised and the shock waves from the traumatic events of eighteen months ago have subsided. 3  See http://www.iata.org/whatwedo/economics/ for data compiled by the International Air Traffic Association (IATA). 4  The 8.5% increase relates to the seven-month period Q2 2009 to Nov–Jan 2010. 5  UK exports of goods and services grew in volume terms by 5.4% per annum from 1992 to 2007; exports of goods excluding oil and erratics increased by 4.5% over the same period. 6  This has been reflected in an upgrading of world growth forecasts for 2010. For example, the IMF forecast of GDP growth across the world economy this year has risen from 1.9% in April 2009 to 3.9% in its latest World Economic Outlook (January 2010).
Attention at the highest management level is therefore vital to ensure the formulation of the most appropriate ICT strategies for banks to remain competitive. The new banking environment is about differentiating banking products and services that provide increased choices, control, security and accessibility. The ability of financial institutions to deliver products and services in the most efficient and effective manner will be key to determining performance and relevance. In this area, financial institutions in Malaysia have not been behind in embracing the rapidly evolving technologies and in taking initiatives to enhance the delivery channels. There are 12 banks offering Internet banking facilities while five have introduced mobile banking. The adoption of chip technology now also offers new forms of payment choices and higher security to the public. The introduction of the Bankcard to replace the magnetic stripe ATM cards and efforts towards migrating to EMV compliant credit cards before end-2004 is indeed an important step forward. A further development has been the introduction of the MEPS Cash, the national e-purse scheme as an alternative electronic payment mode to using cash for making retail payments. The ATM machines of the participating banks and terminals at retail outlets are being upgraded to facilitate MEPS Cash transactions. With these developments, specific programmes need to be implemented to promote the usage of MEPS Cash among the public and business entities. Indeed, this e-payment program is a good start to promote a wider use an acceptance of this means of payment.

In this respect, I note that the banking industry has drawn up a communication strategy to raise consumers awareness of its convenience, speed and efficiency and to encourage its use. A smooth functioning payment system is critical to the effective functioning of the economy. As the payment systems continue to evolve, Bank Negara Malaysia, will continue to facilitate and foster the safety and efficiency of the payment systems to safeguard public interest. To enhance the efficiency of the payment systems, Bank Negara Malaysia has recently reviewed the legal and regulatory framework of the payments system. A comprehensive legislation on the payment systems is being put in place to provide the mandate for Bank Negara Malaysia to effectively oversee and facilitate greater development of the payment systems. The legislation would also promote a conducive and liberalised environment for the modernisation of the payment systems in Malaysia. Several policy decisions have also been made. Access to the payments system has been broadened with the relaxation of the policy on the offering of payment gateway services and issuance of credit cards. Banks are allowed to operate their own payment gateways and non-banks are permitted to issue credit cards if they have established line of credit mechanism from the banks, or have set up a joint venture company with the banking institutions.
More recently the Fund adopted a set of criteria designed to limit the risk that the Fund would make largescale resources available too frequently and in conditions where they would be unlikely to contribute to a resolution of the crisis. These various reforms gave the Fund a substantially more effective insurance mechanism for emerging market economies than it had before. Building on this progress, I see the key elements of a credible insurance mechanism as including the following: •  Finance must be conditioned on a policy framework strong enough and timely enough to restore confidence. Fund resources can’t compensate for a lack of policy credibility, and lending official resources to fund an inadequate policy effort may make the situation worse. •  The scale of finance provided has to be calibrated to the need, and the needs can be substantial in today’s world. The Fund can only fill part of the gap, but it has to be able to fill a credible share of the gap if it is to play a successful part in catalyzing other resources to flow. •  Flexibility to structure programs appropriate to the circumstances and the borrower’s policy efforts is essential. The Fund needs to be able to substantially front-load financial packages, when this is warranted. Making available small tranches of resources over the life of a program does little to address the realities of open emerging market economies facing liquidity problems.

Thomas Jordan: Macroprudential instruments and balance sheet risks Introductory remarks by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 16 December 2010. *  *  *  In my following remarks, I will address two issues in depth. I will start by detailing the set of instruments which the Swiss National Bank (SNB) should have at its disposal for the prevention of financial crises. I will then take a look at the risks on our balance sheet. Macroprudential instruments at the SNB More than three years have passed since the outbreak of the international financial crisis. The crisis made two things very clear. First, the capital and liquidity buffers in the financial system were far too low. Second, systemic risks had been grossly underestimated prior to the crisis or had not even been identified. Almost nobody suspected that the risks were so closely interlinked, nor that problems in a small segment of the US mortgage market could rock the global financial system and the world economy. In order to make the financial system more resilient, one thing that needs to be done is to strengthen the capital and liquidity buffers. Significant progress has already been made in this regard with the approval of Basel III and the new “too big to fail” (TBTF) regulations. These measures should help ease the problems in connection with the TBTF issue significantly. But there will be other crises in the future, too.
Last but not least, our free floating exchange rate system has permitted the exchange rate to depreciate nearly 11 percent in real terms with respect to its trough of 2013, helping adjust the current account and favoring the competitiveness of our export sector. The saying goes that what is obvious is not talked about, and what is not talked about is forgotten. So I have thought relevant, especially in this environment that at times becomes overwhelmingly pessimistic, to stress how well equipped our economy is to deal with adverse situations. I think that the comparison with other economies of the continent, which have also suffered the brunt of the fall in the prices of our commodities, is revealing: most of them have high current account deficits and several show fiscal situations that are worrying to say the least. In many of them, high levels of dollarization or currency mismatches in the financial sector, restrict the room for exchange rate adjustment and force authorities to use less efficient instruments to achieve their goals. Chile’s reality is different: our economy’s adjustment occurred sooner than in other countries and it did so rapidly and deeply. This situation allows us to look into this and the coming years with some peace of mind. In this context, and as we projected in December, output growth has tended to stabilize around 2.5 percent annually, which is low, but in line with our baseline scenario should increase gradually through the year.

Rodrigo Vergara: Chile’s March 2015 Monetary Policy Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report before the Finance Committee of the Honorable Senate of the Republic, Santiago de Chile, 30 March 2015. *  *  *  The Monetary Policy Report of March 2015 can be found at http://www.bcentral.cl. Accompanying charts can be found on the Central Bank of Chile’ website. Introduction Mr. President of the Finance Committee of the Senate, senator Andrés Zaldívar, senators members of this Committee, ladies, gentlemen, I am grateful for your invitation to present the vision of the Board of the Central Bank of Chile about the recent macroeconomic developments, their prospects and implications for monetary policy. This vision is detailed in our Monetary Policy Report (IPoM) of March 2015. But first and foremost, a few words of solidarity towards my fellow citizens that have recently suffered Nature’s wrath. The images and stories we have been receiving of the catastrophe that has swept across our country’s north are devastating and fill us with concern. In the past few months, inflation has exceeded December’s forecasts, and it is stubbornly above 4 percent. This Report’s baseline scenario also estimates a slower return to the target range than foreseen at the end of 2014. The depreciation of the peso continues to be the main factor behind the price dynamics, which, coupled with widespread indexation and a tighter than expected labor market, has pushed the core measure, i.e.