samchain/econo-pairs-v1 huggingface dataset:
But just as there is evidence that increased financial intermediation is often a Good Thing, so there is also evidence from numerous past credit/asset price boom-bust episodes that a juxtaposition of rapid credit expansion and sharp asset price increases is often a harbinger of a painful bust to come. So everything hinges on whether the underlying developments are sustainable or not. The mistake of (most of) the economics profession, along with many others, was a failure to see what was really going on beneath the surface and to understand how disruptively things could unwind. But, as I shall explain, I believe that the standard tools of economic analysis, far from being proved redundant, can shed useful light on what went wrong. Macroeconomic antecedents The proximate causes of the present crisis undoubtedly lie within the financial markets. But it is worth dwelling briefly on the macroeconomic environment in the years preceding the crisis, which was conducive to the formation of what proved to be an unsustainable credit bubble. BIS Review 101/2009  3  The Great Moderation To begin with, this period was characterised by an unusually high degree of macroeconomic stability, with steady growth and low and stable inflation in most of the advanced economies; see for instance Fig. 4, which shows performance in the G5 countries before and after 1992 2 . There are three broad explanations for this “Great Moderation”. First, it could just have been a happy accident, if this was a period characterised by unusually small, or a benign sequence of, shocks.

Notes: Chart shows the sensitivity of different capital flows to a negative "push" shock. Coefficients are standardised by each component’s share of total flows e.g. the red MBF bar shows how total Capital Flows-at-Risk would respond to a one standard deviation tightening in global financial conditions if all capital flows were accounted for by MBF. Estimates are based on the FSB’s measure of ‘collective investment vehicles with features that make them susceptible to runs’, see FSB Global Monitoring Report on Non-Bank Financial Intermediation 2018. 18 The initial version of the speech mistakenly referred to Real Estate Investment Trusts here, instead of open-ended funds. 17  14  All speeches are available online at www.bankofengland.co.uk/speeches  14  The third aspect of the pipes is the global financial safety net (GFSN). Developments in this regard have arguably further increased Capital Flows-at-Risk. The GFSN has become more fragmented over the past two decades and its core – IMF resources – has shrunk relative to the size of the global financial system (Chart 14). As a result, individual countries have chosen to self-insure at high cost to both themselves and the rest of the world. While the IMF’s nominal resources have more than tripled over the past decade, they still only represent around 1% of global gross external liabilities and have been on a downward trend from 2.5% in 1980. Other multilateral arrangements, such as Regional Financing Arrangements (RFAs) and swap lines, are only partial substitutes.
Ahead of the crisis, there was a robust debate on whether monetary policy should seek to moderate credit/asset-price booms as well as maintain low inflation. On the one hand, the Bank for International Settlements and others (e.g. Bill White, 2006; Stephen Cecchetti et al., 2002) argued that policy should be set tighter than justified by the inflation outlook so as to “lean against the wind”. On the other hand, Chairman Greenspan and others at the Federal Reserve (Alan Greenspan, 2002; Bernanke et al., 1999) advocated only responding to such events in so far as they affected the immediate macroeconomic outlook, but acting aggressively to stabilise markets in the event of a correction, sometimes referred to as “cleaning”. The Fed broadly followed such a policy during the dot-com boom-bust. Before the crisis, I stood some way between these two positions (Bean, 2003). On the one hand, a policy of leaning against the wind is perfectly consistent with the practice of flexible inflation targeting once it is recognised that financial instability usually results in a sharp contraction in demand and potential disinflationary pressure. Undershooting the inflation target in the near term could then enhance the chances of success further out. On the other hand, there are practical obstacles to the implementation of a “leaning” policy. In particular, such a policy involves accepting lower output in the short term in return for uncertain future gains and also runs the risk of precipitating the very collapse one is seeking to avoid.

APRA started signalling its concerns to bank executives during 2002 and in 2004 went on to increase the capital requirements on uninsured “Low Doc” loans. More generally, APRA seems to have been quite strict in ensuring that loan origination standards were maintained and banks made prudent provisions for losses. This robust regulatory response was complemented by a slightly tighter monetary stance and numerous “open-mouth operations” by the RBA highlighting the growing risks in the housing and credit markets. The effect of these actions was to take some of the steam out of the housing market and ensure that banks were in a better position to withstand the global financial crisis when it finally broke. (For a fuller discussion of the Australian experience, see Paul Bloxham, Christopher Kent and Michael Robson, 2011.) Other examples of macroprudential regulation in action include: successive increases in risk weights on commercial and residential property loans by the Reserve Bank of India during 2005–8; dynamic provisioning after 2000 in Spain; and quantitative constraints on mortgage lending in Hong Kong in 1994. There are several other instances. Like Molière’s M. Jourdain, some have been speaking prose all along; the rest of us just need to catch up. The evidence suggests the effectiveness of these tools is, though, variable and we should therefore not expect too much from them (see Committee on the Global Financial System, 2010).
And enormous cross border flows will be required to close EME infrastructure investment gaps and to finance the essential transition to a low carbon economy. Today, I want to examine what drives capital flow volatility and, in the process, sketch an agenda for sustainable capital flows in the new world order. Specifically, what should be the priorities to increase sustainable cross border capital flows? How many are the responsibility of the receiving country? What about the advanced economies who set the tone for the global financial cycle? And to what extent does the structure of the international monetary financial system itself, including the global safety net, determine safe flows? To begin to answer these questions, the Bank of England is developing a holistic “Capital Flows-at-Risk” framework that assesses the relative contribution of the three drivers of Capital Flows-at-Risk:4   ‘Pull factors’ – domestic conditions and institutions that affect the relative attractiveness of investing in an individual country.   ‘Push factors’ – that determine global risk appetite and financial conditions, particularly the level and prospects for US monetary policy and financial stability.   ‘The Pipes’ – the structure of the global financial system itself, particularly the degree to which it dampens or amplifies shocks. 4  This builds on early work by the IMF presented in the October 2018 Global Financial Stability Report relating to portfolio flows. More details on the Bank of England work will be forthcoming in a Working Paper.

The significant improvements in the institutional frameworks of EMEs are being offset by the deepening fundamental asymmetry in the international monetary financial system, the continued shrinking of the GFSN, and the rapid rise of market-based finance. Now there can be innocent bystanders: but there should be no disinterested observers. We are all responsible for addressing the fault lines in the global financial system and its safety net. The IIF with its diverse and global membership can make a major contribution. In doing so we will reduce the volatility of capital flows, increase the sustainability of cross-border investment, and meet the great challenges of our age. 31  Since 1980 a maximum of 30% of EMs have concurrently been in an IMF programme, and since 1970 a maximum of 38% of EMs have experienced a crisis concurrently. 32 This is based on projections of emerging market economies’ external balance sheets – see footnote 21. 33 To date three countries, Colombia, Mexico, and Poland, have used the IMFs Flexible Credit Line. While none of the three countries have so far drawn down on these lines, the FCL has provided a valuable backstop for these countries and helped boost market confidence during the period of heightened risks. 22  All speeches are available online at www.bankofengland.co.uk/speeches  22  Annex: Capital flows-at-risk The Bank’s capital flows-at-risk (KF@R) framework is based on the use of quantile regression methodology.
They feared that if systemically important financial institutions were to suddenly fail, financial sector lending might collapse and the economy implode. So the sovereign money initiative, with its focus on payment transaction accounts, does not resolve the ‘too big to fail’ issue. Regulatory adjustments, of the kind that are already being implemented, offer a better solution. The Swiss sovereign money initiative would likewise have a number of problematic consequences for our monetary policy. The initiative requires that the SNB manage the money supply, an idea we abandoned some 20 years ago. Today, the SNB steers monetary conditions via money market rates, a strategy which has served it well over the years. A switch to monetary targeting would therefore be an unnecessary step backwards from our perspective. Another problem for monetary policy would arise from the mechanism for issuing sovereign money set out in the sovereign money initiative. Sovereign money would be created ‘debtfree’, rather than through the SNB’s market operations, i.e. purchasing securities or granting secured loans. It is by no means the case that the SNB’s monetary policy goals only ever require an increase in the money supply; they can also require a reduction, but it is far from clear how the money supply could be reduced if money were to enter circulation ‘debt-free’, as a sort of ‘gift’. Finally, a more general and significant objection to the sovereign money initiative is that the acceptance of the initiative would plunge the Swiss economy into a period of extreme uncertainty.

The new technologies are making lending more efficient, for example by enhancing the way in which information on consumer behaviour  3/4  and requirements is managed, facilitating new data management processes, or by applying automation processes to loan origination, thus speeding up its management. As these new firms make their entry, a new map will be drawn for this financial sector. The most recent trends highlight the importance of collaboration and strategic agreements between new and established firms, to harness the competitive advantages of each: the new technologies of the new firms and the sector experience and knowledge of the established ones. And here I conclude. It is now time for a toast to celebrate your 60th anniversary, in the hope that the National Association of Specialised Lending Institutions will continue its fruitful work for many years to come. I now pass the floor back to your president, who has the pleasurable task of proposing the toast. 4/4
We will give particular priority to the highest-emitting companies and companies that have not published climate plans or have inadequate climate reporting. We will also step up our ownership activities aimed at the financial sector, which is exposed indirectly to climate risk through loans and investments. We tailor our dialogue to the sector and the situation. Steel and cement are good examples. These companies currently have high emissions, but their products will still be needed in the lowcarbon economy. Much of our dialogue on transition plans is therefore about the technological advances and investments needed. We also raise the need for industry standards and the issue of lobbying, which is a major challenge. Chart: Companies’ climate reporting is improving We are seeing signs that our efforts are paying off. For example, when we analysed the reporting of 1,500 companies, we found that those we have actively engaged with have made more progress in their reporting on climate strategy than the other companies. Of course, we cannot claim all the credit for this progress. But progress it is. In future, we will provide more information on our dialogue with companies – what we talk about and the changes we see. Drawing attention to it is a tool in itself. Reporting and voting Our dialogue with companies will not have the desired result in every case. We can then hold boards to account for their decisions through our voting.

Abdul Rasheed Ghaffour: Connecting the dots - harnessing Islamic Finance to accelerate Sustainable Development Goal achievements Keynote address by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the United Nations Development Programme (UNDP) Islamic Finance International Conference, virtual, 24 Feb 2022. * * * Assalamualaikum w.b.t and a very good afternoon, Ms Usha Rao-Monari, UN Under-SecretaryGeneral and Associate Administrator of UNDP, Datuk Syed Zaid Albar, Executive Chairman Securities Commission Malaysia, distinguished guests. Let me express my gratitude to the United Nations Development Programme (UNDP). Firstly, for inviting me to deliver the keynote address today; and secondly, for selecting Malaysia as the host for the inaugural Islamic Finance Thought Leadership Series. The theme C “ onnecting the Dots: Harnessing Islamic Finance to Accelerate SDGs Achievements” is a topic close to our heart. It also resonates very well with the vision and development priorities of Bank Negara Malaysia in the Financial Sector Blueprint which we released just last month. “In the midst of every crisis, lies great opportunity”. These words by the renowned Albert Einstein are indeed very apt. The COVID-19 pandemic offers a proverbial “reset button” for nations to rebuild the economy and society with greater resilience and preparedness. This means leveraging this moment towards building pathways for long term sustainability and inclusive growth with the seventeen SDGs as our guiding compass. This need is even more pressing now with 2030 SDG targets looming over the horizon and a financing gap of USD 4.5 trillion per annum1.
Through our monetary policy, we are attempting not only to keep inflation at a low and stable level, but also to support production and employment in the current recession. A divided economy The Swedish economy is divided, with a significantly worse situation in export-dependent industries than in the private service sector. Even though the lowest point of the recession has passed, we are still experiencing the effects of the crisis on world trade. The Swedish export market has experienced a significant decline. At the same time, the expansionary fiscal and monetary policies have enabled the activity level of those areas of the economy focused on the domestic market to be maintained. This is clearly reflected in the development of different sectors during the economic downturn. While industrial production fell by over 20 per cent during the year leading up to the start of 2009, the production of private services only declined by approximately 5 per cent during this period. This divided economy has also been visible in the labour market. The labour market in export industry dependent areas outside the major cities is far bleaker than it is in the servicedominated major cities. While industrial employment decreased by approximately 100 000 between the autumn of 2008 and the autumn of 2009, employment within the service sector remained largely unchanged (Figure 18). Low inflation during the forecast period We expect low inflation during the forecast period (Figure 19).

Under normal circumstances, agreements covering several years are an advantage, as these reduce uncertainty regarding future price and wage developments. However, the current situation is not normal. This means that making contractual commitments in respect of agreements for longer periods of time may be difficult. As I mentioned in my introduction, I have no advice regarding the outcome of this year’s collective bargaining. Instead, I have tried to describe the economic setting for this collective bargaining. The necessary deliberations must be undertaken by the social partners together. Concluding remarks Wage formation has functioned well over the last ten to fifteen years. It has contributed to our success in maintaining inflation on a low and stable level, at the same time as real wages and growth have developed strongly. My hopes are that this year’s collective bargaining will contribute towards Sweden’s continued positive economic development, once the effects of the financial crisis have ebbed away. BIS Review 11/2010  7  Figures  8  BIS Review 11/2010  BIS Review 11/2010  9  10  BIS Review 11/2010  BIS Review 11/2010  11  12  BIS Review 11/2010  BIS Review 11/2010  13  14  BIS Review 11/2010  BIS Review 11/2010  15  16  BIS Review 11/2010
The public debt to GDP ratio currently at 43 percent is projected to stand well below the sustainability ceiling under the ongoing fiscal reform. In coordination with the expansionary fiscal policy, monetary policy remains accommodative to reinforce the economic recovery. The Monetary Policy Committee (MPC) has decided to keep the policy interest rate on hold at a low level since April 2015. Yet the MPC deems that monetary conditions should remain conducive until the economic recovery becomes more broad-based and more robust. For the future, the MPC’s decision on monetary policy will be carefully balanced between accommodating economic recovery and avoiding financial stability risks that could result from an extended period of low interest rates. Ladies and gentlemen, To wrap things up before I move to the second part of my talk, the Thai economic recovery has become more broad-based with a firmer momentum compared with last year while our economy has relatively strong buffers compared to emerging-market peers in the region. Now let me turn to the way forward for the Thai economy. With the short-term trajectory of the Thai economy holding up well thanks to the first two ‘arrows’ as in the Abenomics terms, namely fiscal stimulus and monetary easing, Thailand’s long-term future depends critically on the success of the third arrow of ‘structural reforms’. This brings me to the second part of my talk tonight on the way forward for the Thai economy, and how we and our partners like Japanese businesses may work together towards sustainable economic prosperity.

In itself that  2  BIS Review 128/2008  does not affect the ability of banks to fund lending, but confidence has been badly shaken after the traumatic events of the past few weeks. New sources of funding will develop only slowly, although the temporary government guarantees of new lending to banks will help. So it will take time before the recapitalisation leads to a resumption of normal levels of lending by the banking system to the real economy. And we cannot assume that there will not be problems in other parts of the financial system and in some emerging market economies to be overcome before the crisis can truly be described as over. With the plan for recapitalisation in place, the focus of attention has moved to the outlook for the UK and world economies. Over the past month, the economic news has probably been the worst in such a short period for a very considerable time. The most recent activity indicators for the second of half of the year have fallen sharply. In the UK, unemployment continues to rise and, over the past three months, has risen at the fastest rate for seventeen years, albeit from a relatively low level. House prices declined by about 5% in the third quarter and are 13% lower than a year ago. The recent weakness of the housing market is likely to continue. And if the news on the domestic front were not sufficiently discouraging, the rest of the world economy also appears to be slowing rapidly.
Lars Nyberg: Economic slowdown - but how soon and how severe? Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, to Danske Securities, Stockholm, 2 May 2001. *  *  *  I would like to begin by thanking you for the invitation to speak about economic developments in Sweden and the world around us. We economists usually begin and end by covering ourselves and pointing out that the situation is uncertain and that assessments can vary. However, this seems a more relevant approach than normal right now. A lot has happened in recent months and there are some important pieces missing from the economic puzzle. When in December we raised the repo rate by a quarter of a percentage point, to 4 per cent, we saw signs of an incipient overheating in the Swedish economy. We were approaching the production ceiling in a situation where a number of sensitive wage negotiations were under way and we assessed that the krona could remain weak for some time longer, which would give extra stimulation to export demand. Although we saw signs of a slowdown, particularly in the American economy, the likelihood of this slowdown having a serious effect on the Swedish economy over the next few months seemed limited. The overall assessment was that the Swedish economy needed some easing up on the throttle to move down into a lower gear. Today, just over four months later, the picture looks rather different in several important aspects.

They have partnered with FinTechs to harness the capabilities of new technologies and deliver more customised solutions. For example, UOB has partnered with Personetics to use artificial intelligence to identify individual transaction demands and enable UOB to provide customers with real-time and personalised guidance on their financial decisions. Second, they have built digital banks in overseas markets, leveraging a lower-cost operating model to quickly acquire new customers. For example, DBS launched digibank in India and managed to acquire over 2.5 million customers in its initial two years of operations. The bank has also recently replicated its digibank strategy in Indonesia. DBS was ranked by Euromoney as the world’s best digital bank last year. Third, they have adopted more customer-centric approaches, integrating solutions for their financial and non-financial needs. For example, OCBC has built a niche marketplace to provide curated products and services for mothers and their babies. The bank also launched the OCBC Silver Years programme to provide seniors a one-stop solution for financial advice, insurance products and lifestyle options. 28. Digital challengers with innovative business models can add diversity and choice to banking systems. They can often serve the needs of traditionally underserved segments, such as the credit gap faced by young and micro-enterprises. They could also bring with them deep digital know-how and insights from operating non-bank businesses. In China, for example, MYBank, has broadened financial inclusion, with 80% of its clients being first time borrowers like mom-and-pop shops. 99% of its customers repay on time.