samchain/econo-pairs-v1 huggingface dataset:
Many feared the worst for the U.S. economy—and especially for New York City. After all, the stock market crash in 1929 was followed by the Great Depression. As a young economist working on Wall Street, I certainly was worried—the situation didn’t seem consistent with future job stability. I went out that evening and bought myself a leather jacket. If I lost my job, I wanted to leave with something on my back, something tangible. As it turned out, although the city’s economy and Wall Street did indeed sustain a steep downturn, both were able to recover and to prosper. Not only was there no depression, the economy avoided falling into recession. And, importantly to me, I was able to keep both my job and my leather jacket. In retrospect, the 1987 crash was just a hiccup in what ultimately turned out to be a remarkable upturn in the city’s performance and prospects. However, to really understand this story of the city’s resilience, we need to take a look back at one of the darkest periods in New York City’s history: the 1970s. I remember New York City in the 1970s from my freshman days at Columbia University. Columbia was a great place to be a young student. There were engaging professors and I had the opportunity to read the great books of the university’s core contemporary civilization curriculum.

The efforts of the city and the state, starting in the mid-1980s, to redevelop the Theatre District and Times Square area played an important role in revitalizing tourism. But, of course, the city’s well-deserved reputation for culture and arts goes well beyond Broadway—to the hundreds of Off-Broadway and neighborhood theaters, museums, music venues and organizations like yours. Supporting this cultural infrastructure is important to maintaining a vibrant economy and a bright future. The experience of New York City, which has gone from crisis to vibrancy, shows that the past need not be prologue for the future. It also shows that a well-managed regime of fiscal control can help begin the process for future recovery. Other cities and regions are at different points in this journey. Puerto Rico, for example, which has been in recession for many years and which defaulted on its debt obligations earlier this year, is at a particularly critical juncture. On the positive side, the fact that Congress has enacted legislation, the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, does provide a way forward. The prospect for good fiscal stewardship has improved and this is an essential first step in the Island’s recovery. As I have noted elsewhere, there are significant opportunities for action that can leverage the Island’s strengths to foster economic growth. These include its bilingual adult population, an open economy occupying a central position in the Caribbean, wide experience as host to international corporations and close economic ties to the U.S. mainland.
This is due to the slightly improved global risk sentiment and Turkey’s falling country risk premium as well as the CBRT’s monetary policy strategy to reduce interest rate uncertainty which had a greater impact on short-term rates. Meanwhile, 2-year real rates declined on falling nominal rates and rising inflation expectations (Chart 6). Loan rates that trended down in the first half of 2013 started to go up by the third quarter (Chart 7). This quarter-long uptrend reflects global financial developments and the CBRT’s July and August tightening of overnight lending rates via the interest rate corridor. Moreover, deposit rates, currency swap rates, the CBRT’s average funding rate as well as bill and bond rates issued by banks, which all represent the Turkish lira funding costs of banks, increased as well in the same period (Chart 8). After a more robust first half compared to the average of past years, loan growth has come down to levels similar to the average of those years as of August (Chart 9). Rising loan rates due to recent financial fluctuations and our cautious monetary stance have contributed to this slowdown. Yet, the annual rate of loan growth still recorded a striking 25 percent in the third quarter (Chart 10). We envisage the cautious monetary stance, recent macroprudential measures and weak capital inflows to bring the loan growth rates gradually to more plausible levels in the forthcoming period. The current policy framework has a favorable impact on the current account balance.

From the standpoint of the banking sector, the ultimate impact of the crisis will depend both on its scale and duration and on the effectiveness of economic policies in mitigating its effects on households and firms. Along these lines and in the case of monetary policy, in December we extended our pandemic emergency purchase programme until at least March 2022 to ensure that financing conditions are favourable. More recently, the ECB has sought to counter the rise in long-term interest rates observed in recent months, in a setting in which the macroeconomic projections are similar to those in December, with a medium-term inflation forecast some distance off our objective and below that expected before the crisis. Specifically, at the ECB we have stated our intent to use the flexibility of our pandemic emergency purchase programme to increase purchase volumes in the coming months. From the vantage of the macro- and micro-supervisory authorities, we have continued to stress that the use of capital buffers by banks is appropriate in the current situation in order to recognise credit impairment and to continue providing sound credit to economic agents. Our empirical analysis shows that the use of these buffers would give rise to a positive effect on economic growth which, in turn, would ultimately translate into likewise higher solvency levels. 5  One issue worth monitoring in the coming months will, precisely, be the capacity of, or incentives for, banks to use the capital buffers available in the face of risk-materialisation scenarios.
: Quarantines begun in Santiago East  1  5  +116 3 %  Pharmacies  3  0  7  Department stores  Mar. 03  May 05  (*) Percentages show variation between 30 July and 26 August. Source: Central Bank of Chile using Internal Revenue Service data. 17  Jul. 07  1 0  Figure 11  Evolution of local assets v. baskets of comparable countries (1) Tipo de cambio (index, 17/April/2020=100)  102  10-yr sovereign bonds' interest rate (dfiference w/respect to 1/June/2020, percent)  102 0.4  0.4  0.3  0.3  0.2  0.2  0.1  0.1  0.0  0.0  -0.1  -0.1  98  98  94  94  90  90  86 17-04 17-Apr. 86 -0.2  Jun. 06 17-08 17-06 17-Jun. 17-Aug. Comparable basket (2) Sep.  Jul. 07  Aug. 08  09  -0.2  Chile  (1) Vertical lines from left to right mark the dates of: the June monetary policy meeting (June 16), approval in Congress of the idea of legislating on a bill that would allow the withdrawal of 10% of the AFP funds (July 8), and first announcements by the Central Bank of Chile (July 20). (2) The basket of comparable economies is made up of a combination of Latin American assets and commodity exporters (Australia, Brazil, Colombia, Mexico, New Zealand and Peru). Source: Bloomberg.

One argument is that it is good to have some margin as there is a risk that CPI overestimates inflation. For instance, it is difficult to exactly measure price increases as a result of better quality, which is thus not inflation. Another argument is that it is often difficult in practice to implement nominal reductions in prices and  BIS Review 8/2006  3  particularly wages. Some measure of inflation may therefore simplify necessary adjustments in relative wages and prices. At the same time, there have seldom or never been attempts to stabilise inflation at a level much higher than 2 per cent. This may be because this does not sufficiently anchor inflation expectations. Experiences from Sweden and other countries indicate that low, stable inflation is an important condition for favourable economic growth and that the work on maintaining low, stable inflation is made easier if the central bank can act independently. This is why the Riksbank, like many other central banks, has been given greater independence and an inflation target. If the central bank is not allowed to independently formulate monetary policy there may be political pressure to conduct monetary policy that aims to achieve other objectives. How does the Riksbank influence inflation? The tool the Riksbank has at its disposal for steering inflation is the repo rate. This is the interest rate the banks pay to borrow money from us. The objective of changes in the repo rate is to influence demand in the economy and thereby price developments.
Fines for bad behavior drain resources that could be better used to expand access and improve services, but billions of dollars in avoidable penalties are just the start. The time spent handling a legal crisis is time not spent on more productive pursuits. Moreover, I worry that, in the long term, an industry that develops a reputation for dubious ethics will not attract the best talent.3 In contrast, a trustworthy financial services sector will be more productive and better able to support the economy. Reliable financial intermediaries can help increase the flow of credit, promote economic growth and make the financial system more stable. This is why restoring trustworthiness must be the ultimate goal of reforming culture. The industry’s shared norms—its culture—will not change by mere exhortation to the good, whether from me or from the industry’s CEOs. In my experience, people respond far more to incentives and clear accountability than to statements of virtues and values. The latter are worthy and necessary, but remain aspirational or even illusory unless they are tied to real consequences.4 What does it mean for a firm to profess to putting the customer first, if employees are compensated and promoted regardless of what’s good for customers? Or, worse, if they are not held to account for activities that can harm customers? If we focus on nothing else in today’s conference, let’s explore how best to structure incentives and reinforce accountability to align with core purposes and first principles.

William C Dudley: Reforming culture and behavior in the financial services industry - expanding the dialogue Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the conference "Reforming Culture and Behavior in the Financial Services Industry: Expanding the Dialogue", Federal Reserve Bank of New York, New York City, 20 October 2016. * * * Welcome to the Federal Reserve Bank of New York, and to our third conference focused on culture within the financial services industry. It is encouraging to see all of you in attendance today—in particular, the many non-executive directors, representatives from the investor community, and foreign supervisors who have joined us to help broaden and deepen the dialogue. Thank you for your participation. As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 The evidence is pervasive that deep-seated cultural and ethical problems have plagued the financial services industry in recent years. Bad conduct has occurred in both investment banking and securities market activities as well as in retail banking.2 This has eroded the industry’s trustworthiness. This erosion impedes the ability of the financial services industry to do its job. That job is financial intermediation—to facilitate the efficient transfer of resources from savers to borrowers, and to help customers manage the financial risks they face. Verification—whether through regulation or internal controls—is an expensive substitute for trustworthiness.
Since 2005, they have had an above-average impact on investment performance with an annual return measured in Swiss francs of 2.8%. The second challenge comes from the large fluctuations in our annual results. An expanding balance sheet increases both absolute potential profit and absolute potential loss. Given the current size of our balance sheet, a small loss in percentage terms can mean a large amount in Swiss francs. Moreover, the share of our balance sheet represented by our currency reserves has grown. As a result, the balance sheet is more exposed than before to the volatility of the  Page 6/10  financial markets, especially to exchange rate fluctuations. We cannot hedge against these fluctuations because this would lead to an appreciation of the Swiss franc. Losses, therefore, cannot always be ruled out. What implications does this have? Occasional losses, however substantial, are not fundamentally a problem for our monetary policy. As a central bank, we could still operate even if our equity capital were to become negative for a certain period. Nevertheless, this is something we are determined to avoid. Our policy on provisions and the profit distribution agreement are therefore geared towards ensuring a sound capital base. Concluding remarks Ladies and gentlemen, to end my speech, let me summarise my main points. We are maintaining our expansionary monetary policy. Inflation in Switzerland is still low. Production capacity continues to be underutilised and the Swiss franc remains significantly overvalued. Many companies are still facing strong pressure to adapt.

The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market if necessary are intended to ease pressure on the Swiss franc. Negative interest does so by at least partially restoring the traditional interest rate differential against other countries. What effect does our willingness to intervene in the foreign exchange market have? With our foreign currency purchases, we supply the market with additional Swiss francs when demand for our currency is particularly strong. Without the negative Page 3/10  interest rate and our willingness to intervene, the Swiss franc would be even stronger, inflation would fall once again, and unemployment would rise. We will continue to make the most of our monetary policy latitude in the future. If necessary, we can lower the negative interest rate further or buy additional foreign currency. Of course, careful consideration always precedes any decision we make, based on the maxim that the expected benefit of a monetary policy measure must outweigh the associated costs. Over the past financial year, the implementation of our monetary policy has led us to make foreign currency purchases totalling some CHF 67 billion. With valuation changes as well as interest and dividend income, the SNB’s foreign exchange reserves increased by CHF 86 billion in 2016 (cf. chart 5). The current size of our balance sheet reflects our crisis management over the last ten years. What does this expansion of the balance sheet mean for our investment policy? Let’s look at this more closely now in the second part of my speech.
•  Not long after, in the 1870s, the next wave of excessive optimism had to do with rapid industrial development, not least the construction of railways. Stockholms Enskilda Bank, for example, was in difficulties at the height of the crisis in 1878. •  Another serious setback for what was then the “new economy” occurred in 1907. The potential profits from hydroelectric power and electrification, forest industries and iron ore had been exaggerated. •  Then we have the undue optimism after the end of World War One, with a major investment boom and speculation in real estate and shares that peaked in 1921. It may be worth mentioning that measured in constant prices, it was not until the 1980s that turnover on the Stockholm stock exchange again reached the level in 1918. That says something about the strength of the speculation at that time. •  After that, as we all know, there was 1929 and the early 1930s, with a falling stock market, banking problems and the Kreuger crash as prominent events in Sweden. •  More than fifty years then passed before Sweden experienced another period of genuine financial turbulence in the late 1980s. The world, including Sweden, was hit by the stock market collapse in October 1987. A bubble developed in Sweden’s real estate market and subsequently burst, severely damaging the financial system. Resolute action by the political system in the early 1990s did, however, prevent a financial meltdown that might have plunged our country into an even deeper crisis.

With excessive euphoria, the expansion of the capital stock may go too far. Sizeable investments are made in sectors that will never yield the expected return. The subsequent adjustment accordingly involves a marked fall-off in investment activity and thus a weak development of demand. Both the excessive investment earlier and the inevitable correction of asset prices contribute to this. The setback can also lead to problems in the financial system in general. Much of what the Austrian School had done was forgotten during the half-century of regulation from the crisis in the 1930s to the 1970s. Political economy was dominated instead by Keynesianism. It may also be the case that the efficient market hypothesis has been interpreted too freely. This theory largely amounts to a warning that the market is basically the best judge of a share’s real value. Under normal conditions that is probably true. When a bubble has got under way, however, the market’s normal information processing tends to be disrupted and prices are driven instead by impenetrable forces of a psychological nature. In many respects the financial turbulence in the 1980s and ‘90s was a rude awakening for many economists, decision makers in economic policy, authorities, representatives of the business and banking communities and people in general. I find it important to underscore how broad was this lack of insight into how financial problems arise. One cannot single out a person or group as being solely responsible for how things took a turn for the worse.
Daily trading volumes have quickly picked up in line with interest from market participants and now amount to about 3-4 billion baht per day, compared to about 1-2 billion baht last year. Annual turnover for 1999 for certain popular issues amount to one-third of its outstanding amount, which is a very encouraging sign. Bid-spreads are narrowing and now can boast a level not significantly far from the more developed bond markets. We have completed a yield curve available on the internet that spans from less than one-year, out into the 15-year tenure. This, complemented with the low interest environment, has boosted the issuance of corporate bonds. Last year alone, we have seen over 200 billion baht of private bonds issued. Of course, some of these were used to recapitalize the banking system, but no small amounts were also used for refinancing corporate debts as well as for business expansion. We are fortunate that the legal framework for the supervision of the capital market, namely private and public offering and investor protection, have already been instituted. In fact the private debt market started to flourish since 1992 after we set up the Securities and Exchange Commission. With this framework, the private debt market was able to resume activity again after the crisis but this time with the government yield curve as pricing benchmark.

M R Chatu Mongol Sonakul: Thoughts and reflections on the development of the domestic bond market in Thailand  Speech by Mr M R Chatu Mongol Sonakul, Governor of the Bank of Thailand, at the ADB Conference on Government Bond Market and Financial Sector Development in Developing Asian Economies, held in Manila, 28-30 March 2000. *  *  *  Mr Chairman, distinguished Guests, Ladies and Gentlemen, I am honored for the opportunity to share with you some of my thoughts and reflections on the development of the domestic bond market in Thailand. The Asian economic crisis, which started in Thailand in 1997, posed the most severe challenges to policymakers - how to contain the crisis, how to ease the burden of the poor and how to ensure a sustained recovery. But the biggest challenge to us all must be how the crisis could have been avoided in the first place. If I can turn back the clock and have a wish, my list may be long. But high in its ranking would be a well functioning Thai baht bond market. Benefits of bond markets A bond market provides a basic infrastructure for the development of the financial system and the overall economy. The bond market is an important alternative to bank lending. During a crisis, banks themselves often come under liquidity pressure, from both domestic and foreign withdrawals. Not only do they cease to lend, they also recall loan from their best debtors.
Ardian Fullani: Financial supervision and measures to strengthen financial stability Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the International Conference for the 10th Anniversary of the Central Bank of the Republic of Kosovo, Prishtina, 30 October 2009. *  *  *  Dear Governor Rexhepi, Distinguished ladies and gentlemen, It is a pleasure for me to participate in this Conference which is perfectly organized by the Central Bank of the Republic of Kosovo, and to witness the amazing progress this institution has achieved in such a short but intense period of time. The energy and desire of the local staff to contribute to the history of this institution, has been rightly channeled by the vision and experience of several managing professionals that have given a valuable contribution in chairing this institution in the last years. I am sure this story will continue to be a successful one, based on the commitment of the management of the Central Bank of Kosovo to achieve and comply with the best work organizational and efficiency standards, by pursuing a clear long-term policy of investing in the quality of its personnel, and by supporting actions that contribute to maintaining fruitful inter-institutional cooperation. In addition, I want to thank the organizers for giving me the honor to speak in front of you today, regarding a topic that has become so relevant in the last year, following this unprecedented international financial crisis.

Revising the liquidation procedures for similar financial institutions with cross-border presence is another area that will confront the public authorities in the world with a stronger challenge. The main purpose of the reform of the financial regulatory framework will be to accommodate new incentives that will create a stronger environment for risk management in the financial industry. The main principle here is “prevention is the better cure”. In this regard, the perimeter of the supervision regulatory framework will be extended to include other important non-bank financial institutions and probably the bank holding companies. At the same time, the approach in the regulatory framework is expected to feature more automatic  2  BIS Review 139/2009  requirements (and less discretionary ones), as it tries to move toward more simplicity and clarity. The move toward simplicity and clarity, will certainly reduce manipulability and enhance transparency and credibility of the banking and financial activity. These changes will be complemented by similar ones in the area of customer protection and market transparency. The regulatory framework of the financial industry is also expected to be less pro-cyclical, as new interesting proposals are being identified to adopt a countercyclical approach for capital requirements, provisioning and accounting. Ensuring responsible governance for the banking and financial institutions is going to be another area of developments. New regulatory requirements and instruments to seek more involvement and higher responsibility of boards of directors for risk management and discourage uncontrolled risk undertaking are being identified.