samchain/econo-pairs-v1 huggingface dataset:
In particular, the fund specific regulation coupled with regulation covering certain activities, such as derivatives and securities financing transactions, have addressed investor protection issues and risks from a microprudential perspective.2 At the same time, the growing fund sector is creating emerging vulnerabilities from a systemwide perspective.3 The asset management sector is highly connected with other parts of the financial system 2/7  BIS central bankers' speeches  through ownership links, common asset exposures and the provision of wholesale funding to banks. Investment funds are not only important depositors in banks; they also provide longerterm funding through the purchase of bank-issued debt securities. Euro area investment funds hold about EUR 400 billion or approximately 10% in outstanding debt securities issued by euro area banks. Banks, on the other hand, lend to funds mainly through repo transactions. So any potential shock to the investment fund sector may quickly spill over to other parts of the financial system. When identifying possible weak spots in the financial system, it is sometimes useful to look back to past crisis events. I recall some 20 years ago, when Long-Term Capital Management (LTCM), a large and highly interconnected hedge fund, collapsed, in the wake of turbulence from the 1998 Russian crisis. The rapidly changing market environment effectively turned LTCM’s business model into a key amplifier. LTCM was betting on longer-term developments in fixed-income markets using exceptionally high leverage. When the fund collapsed, fire-sale spillovers and counterparty exposures threatened to erode the stability of the financial system.

The various parts of the economy are connected, which often means that a strengthening of the weaker parts is even more important to the economy as a whole than to the effects on a particular branch or sector. It is exactly this – the complementarity of the 4 economy – which makes it particularly important to deal with our weak links and to listen with humility to the proposals of the OECD and IMF, for instance. It is often easier to identify problems if one can see things with a little perspective. I believe that the Swedish economy has considerable unutilised potential for a strong growth if we concentrate on it, if we all work together to make our joint cake grow. 4  The significance of a complementarity in economic policy has been demonstrated by, for instance, Aziz and Wescott 1997 in "Policy Complementarities and the Washington Consensus". 4  BIS Review 78/2001
In recent years, our exports have benefited from growth in emerging Asia and our terms of trade, despite a recent drop, are still high by historic standards. The terms of our access to international credit are still privileged. And we have the resources we need to deal with potential emergencies. Our macroeconomic policy framework, which comprises a monetary policy governed by an inflation target, a floating exchange rate and the fiscal rule, has been determinant in this result, as has been the regulation and supervision framework of our financial system. Despite this favorable internal scenario, the evolution of the developed world’s economic outlook has made us again uncertain about how the global economic situation will unfold and how it will affect our country. The lateness and lack of resolution of fiscal and financial problems in the Eurozone have constrained global financial conditions, deteriorated the growth prospects of the world in general and our trading partners in particular, and reduced our terms of trade. All these factors combined have an effect on Chile’s economic growth, whose magnitude is yet to be seen. The baseline scenario of the Monetary Policy Report assumes a limited impact, but there are important risks. The Great Recession of developed economies in 2008–2009 is not totally over. Solving the macroeconomic and financial imbalances where the crisis originated will take a long time, and its effects will remain visible in the world economy.

Nonetheless, higher prices are temporarily weighing on household purchasing power and we must remain vigilant. Sud Ouest: Might the speculative attacks on the some countries’ sovereign debt and concerns over the euro’s future dampen consumption and investment? Christian Noyer: No, there are no grounds for concern. Europe has shown over the past few months that it is capable of rallying together and providing effective and innovative solutions for countries that fall prey to speculative forces. Sud Ouest: But it is evident that this is not enough to deter investors from attacking the sovereign debts of some countries… Christian Noyer: At present, these attacks are centred on the countries of Southern Europe. Markets tend to tar with the same brush all the countries perceived as the most fragile in the euro area, whereas their situations differ considerably. The sovereign debt dynamics of some non-European G7 countries are more worrying that those of many euro area countries. Sud Ouest: Aren’t speculators betting on a break-up of the euro area? Christian Noyer: By definition, this scenario is totally ruled out: no country is willing to consider this option since it would have an astronomic cost for all euro area countries, the strong and the weak alike. Sud Ouest: Won’t the fiscal austerity measures imposed on euro area countries that have benefited from EU-IMF loans have exorbitant social costs? Christian Noyer: They may be hard to bear. But it would be unrealistic to think that growth and purchasing power can be lastingly sustained if public deficits continue to rise.
It is misleading to look upon the cash flow from petroleum activities as income. The appropriate economic perspective is to see the transfer of the cash flow to the Government Pension Fund as a way of transferring capital from one account to another – from petroleum to foreign securities. By doing so, we diversify risk. We must also strive for an equitable distribution of this wealth across generations. The Norwegian authorities have been successful in ensuring that the bulk of petroleum wealth benefits society as a whole. Both the state’s ownership interests through the State’s Direct Financial Interest in petroleum activities (SDFI) and the tax system have contributed. The companies that extract oil earn a reasonable return on their investments and have incentives to invest, but the economic rent has essentially accrued to the general public. Second, the size of the cash flow from petroleum activities also varies. If petroleum revenues were to be used as they accrue, this would lead to wide fluctuations in demand in the Norwegian economy. Third, the use of petroleum revenues has an impact on competitiveness in Norwegian business and industry. A high level and substantial variations in the use of petroleum revenues would have a negative impact on internationally exposed industries. The establishment of the Government Pension Fund and the spending guidelines for petroleum revenues are intended to meet these challenges. The government earns large net cash flows deriving from the oil companies’ sale of petroleum products in foreign markets.

This policy was at the root of many of the problems that followed in the 1970s and 1980s. Today’s formulation of economic policy reflects the experience gained and the lessons learned in these two decades. The economic policy contributed to wide fluctuations in the Norwegian economy. Inflation became high and variable. This was largely due to a perception in the 1960s and 1970s that strong growth and low unemployment could be achieved if we were only willing to accept somewhat higher inflation. But it was gradually recognised that there was no such trade-off. The absence of a nominal anchor was one of the main reasons behind the pronounced swings in the Norwegian economy. With a policy of low interest rates and devaluations, inflation took root. Nominal interest rates were kept at a low level even though inflation rose. Frequent devaluations from 1976 were unable in the long term to prevent a decline in the manufacturing sector. On the contrary, they proved to be self-reinforcing. The wide fluctuations culminated in a credit boom in the mid-1980s. The fluctuations were reinforced by oil price shocks and the use of expected revenues from oil production. The government began already in the 1970s to budget on the basis of future strong growth  2  BIS Review 22/2006  in petroleum revenues. The result was that we spent a large share of our petroleum wealth in the 1970s and 1980s. Welfare schemes were expanded significantly. Manufacturing industry was scaled back.
Some people would argue that the stocks of assets held by Central Banks matter more than the flows of purchases. Others would contend that the composition and size of purchases are the real levers. The issue boils down to whether an expansion in the monetary basis is enough to trigger credit expansion or whether the latter is correlated to banks willingness to expand credit and more importantly to the appetite of economic agents to borrow. Based on how monetary policies have been conducted for the past several decades, banks have always had the ability to expand credit at a given level of interest rate irrespective of the size of the Central Bank’s balance sheet. Being at the ZLB does not change that simple reality. Hence I would tend to argue that, given the transmission channels of an asset purchase program, its composition and length may matter as much as its size. In any event, increasing the size of the Central Bank’s balance sheet, via large scale asset purchases, sends very important signals. This “signaling” operates at several levels. It may contribute to strengthening forward guidance on the policy rate. More importantly, it may have a direct impact on inflation expectations, therefore contributing to lowering real interest rates. When the balance sheet size is explicitly linked to the achievement of an inflation objective as in Japan, it may prove an effective tool to communicate the monetary authority’s determination – what economists would call a “commitment device”.

It is a question of choosing a repo-rate path so that the forecast for inflation and resource utilisation entails the best possible stabilisation of inflation and resource utilisation. As the forecasts play such a central role in the monetary policy decisions, it is of course important that the Riksbank employs good forecasting methods and uses all the relevant information available when the forecasts are produced so that they are as accurate as possible. An important step in the assessment of monetary policy is therefore to investigate whether the forecasts are reasonably accurate. One way to do this is to compare the Riksbank’s forecasts with those of other forecasters. The Riksbank makes such comparisons every year. Another component of the assessment of monetary policy is to analyse how predictable monetary policy is and what impact it has on market rates. Monetary policy mainly acts by influencing expectations regarding interest rates, inflation and the real economy in the future. Expectations regarding the repo rate in the years immediately ahead affect interest rates with  2  BIS Review 32/2010  longer maturities, and therefore inflation and the real economy, more than the repo rate in the period up to the next monetary policy decision. The predictability of monetary policy can be measured in terms of how well the market predicts the next repo-rate path. How effectively monetary policy steers market expectations and market rates can be measured in terms of how closely the market expectations regarding future repo rates correspond to the repo-rate path after it is published.
Jacob, like a number of others here today, epitomises the diversity of the origins of the participants in this symposium since he has served on the faculty of the University of Chicago, was the Economic Counselor and Director of Research at the International Monetary Fund and the former Governor of the Bank of Israel, and is now the Chairman of the Group of Thirty and Vice Chairman of American International Group (AIG). I will now simply make a few brief introductory remarks. Our colleague Mervyn King often says that monetary policy should be "boring". This is certainly not the case today. Monetary policy is interesting. But it is also, and above all, difficult. In many respects, to put it informally, the good times are behind us. Globalisation has no doubt considerably helped central banks over the past decade. Today, this is less clear cut. We are facing a combination of two difficulties. First, at present, for all countries, the risks for growth are on the downside and for inflation on the upside. Beyond the diversity of their mandates, this represents a common challenge for all central banks. Second, because we are all affected, to differing degrees, by the turmoil of the past eight months in the credit markets. In the coming hours we shall hold an in-depth debate on the relationship between financial stability and price stability. But I believe that we will all agree that the conduct of monetary policy is more difficult and more uncertain in a less stable and more volatile financial environment.

If we truly want to enhance financial integration for the purpose of better private risk sharing and convergence across Europe, we need to advance the Capital Markets Union agenda: we should in particular strengthen ESMA’s role as a supervisory authority, at least with regard to wholesale market oversight – while duly involving national authorities when appropriate. The Chairman of the AMF is a talented advocate of this. II. Our priority in method: developing synergies within the SSM as a whole Let me come back to the SSM. After only four years of existence, it is now fully operational, with more than 2,300 supervisory decisions in 2017 alone. Those of you who work within the SSM are the living breathing reality of European integration. Every day you prove that closer cooperation, closer union is not a dream of the past but something we are still capable of today. Part of the SSM’s success stems from its design: the mechanism constitutes an original model of federalism, based on a close and continuous collaboration between the ECB and national authorities at all levels: from the composition of the Supervisory Board to the Joint Supervisory Teams (JSTs), the on-site teams and staff secondments. This does not mean that all is rosy and that culture and practices have fully converged within the SSM. Success allows us to consider now how the day-to-day functioning of the SSM can still be improved. In my view, there are three main strategic priorities: The first one is to further simplify processes.
Timely implementation of consistent and coordinated policies in a coherent manner is also essential to ensure the realisation of the expected outcome of such policies. In this context, this Road Map intends to set the basis for strong policies and credible frameworks to achieve macroeconomic stability with the support of the government and private sector stakeholders. The outline of the Road Map 2019 is as follows: Section 2: The Central Bank’s monetary policy strategy and policies for 2019 and beyond Section 3: The Central Bank’s policies related to the financial sector performance and stability in 2019 and beyond Section 4: Policies Related to Ancillary and Agency Functions Now, let me elaborate further on these aspects. 11  2. Monetary Policy Strategy and Policies for 2019 and Beyond The Central Bank conducts monetary policy in an increasingly forward looking manner with the aim of maintaining inflation at low and stable levels in the medium term thereby supporting the economy to reach its potential. In 2018, the Central Bank conducted its monetary policy in a challenging environment with rapidly evolving adverse global conditions as well as several upside and downside risks on the domestic front. New developments in the global economy in the wake of rate hikes in the United States and the economic normalisation in most advanced economies have demanded monetary authorities around the world to adjust their monetary policies accordingly.

Accordingly, procedures for inward capital flows by foreign investors were further simplified and streamlined while limits on outward capital flows by residents were further 37  broadened in selected areas. The new regulatory measures also include the relaxation on foreign exchange transactions, which enable general permission to Authorised Dealers to transfer enhanced eligible migration allowance in order to overcome procedural delay. We are in the process of reviewing stakeholders’ feedback on the new regulations, orders and directions issued in 2017 under the FEA and intend to revisit those with a view to further simplifying the regulations to improve clarity. We intend to take actions to revisit liberalised capital transactions based on the analysis of macroeconomic dynamics supported by policy oriented research. We also plan to review the criteria in granting permission for money changing businesses to increase healthy competition among market players and reduce informal market activities. The monitoring function will be strengthened further by developing a new real time foreign exchange reporting and monitoring system to capture data on foreign exchange sales and purchases. With a view to obtaining all data pertaining to cross border and internal transactions in foreign currency, we intend to put in place a comprehensive International Transactions Reporting System (ITRS). Meanwhile, as there are no clear provisions under the FEA to combat unauthorised and unlawful activities involving foreign exchange, several enforceable sanctions are expected to be introduced into the FEA to enable the Department of Foreign Exchange to strengthen its surveillance of unauthorised foreign exchange market activities.
Eddie Yue: Islamic finance – its potential to bring new economic growth to Hong Kong Keynote address by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, for the Hong Kong Islamic Finance Forum, Hong Kong SAR, 25 November 2008. *  *  *  Ladies and gentlemen, I would like to thank the organisers for inviting me to speak at this forum, which is being held in Hong Kong for the first time. In the past several months, we have witnessed the unfolding of a global financial crisis. The sub-prime problem in the US and the ensuing credit crunch in the industrialised economies have spread and brought about a weakening of confidence in the solvency of the financial system. Concerns about credit risk exposures among financial market participants mounted following the failure of Lehman Brothers. Interbank money markets in many economies came under extreme pressure or seized up entirely. Extraordinary and concerted efforts by governments and central banks to restore confidence, inject liquidity and recapitalise the banking system appear to have paid off to the extent of preventing the collapse of the banking and financial system although credit and money markets remain stressed. As the turmoil deepened, people have also focussed attention on the wider impact of the crisis on the real economy, leading to a grimmer outlook for global economic performance.

We are now focusing our efforts on four major areas: first, building Hong Kong’s international profile and forging closer ties with market participants in the Middle East; secondly, promoting market infrastructure and establishing policies conducive to the development of Islamic finance; thirdly, promoting talent and knowledge of Islamic financial principles among market professionals in Hong Kong; and fourthly, encouraging the development and launch of Islamic finance products in Hong Kong. Concluding remarks Ladies and gentlemen, the potential for the growth of Islamic finance is clear. The foundations for its development here in Hong Kong have already been laid. It is essential for all of us to look beyond the current global financial turbulence and treat the development of Islamic finance as an investment in the future. With this in mind, I would like to encourage all of you, whether you are regulators, financial institutions or investors, to look critically at the opportunities that lie before us. Islamic finance is a new asset class that has the potential to bring new economic growth to Hong Kong and the region given our wealth of knowledge in financial intermediation, our experience, and our agility in adopting innovative products. So let us work together towards building a stronger and stronger link and increasing cooperation with other global players to identify and capitalise on new opportunities. Today’s holding of the Islamic Finance Forum in Hong Kong is a significant step on a journey that is just beginning. I look forward to travelling this road with all of you. Thank you.
The extremist groups have skilfully used religious and nationalist sentiments to garner political support and protect themselves against arrest. However, the Bali bombing has changed the situation. President Megawati has promulgated tough anti-terrorist decrees, including powers to detain suspected terrorists. The Indonesian government has arrested Abu Bakar Ba’asyir, who is the emir, or leader, of the Jemaah Islamiyah group, who had till now defied the Indonesian authorities to act against him. Government action in the aftermath of the Bali bombings has won the strong backing of key local institutions and the Indonesian population. Parliamentary leaders concurred with the passing of the anti-terrorism decrees, and the leaders of the two largest Muslim groups in Indonesia, the Nahdlatul Ulama and Muhammadiyah, have also voiced their support. The people of Indonesia know that if the militants succeed, not only will international confidence plummet and economic progress grind to a halt, but their country will be torn asunder. Southeast Asian governments will act because they know that the objectives of the terrorists are totally beyond the pale. These are not innocent political dissidents exercising their democratic rights. They are ruthless fanatics, quite willing to destroy innocent lives in order to create civil strife and animosity between communities and countries, shake confidence in Southeast Asian economies and their legitimate governments, and weaken the basis of the states. They cannot succeed, but they can cause great harm in trying. Provided the governments respond vigorously to the extremist threat, they can contain the problem and gradually restore confidence to the region.

Clearly, I think it is neither probable nor desirable that negative rates will be applied to private individuals – except in the case of certain large fortunes – or to SMEs. Firms in the euro area, and especially SMEs and VSEs,ix have benefited from easier access to credit at low rates: it should be noted, however, that on the  Page 9 of 14  whole, they are no longer net borrowers, in other words they can completely self-finance their investments; nonetheless, this historical, and perhaps temporary, inversion is less evident in France. Last, state governments are clear winners, and alongside them the taxpayers, thanks to the savings on government interest payments. In the case of France for example – which can borrow at negative rates at maturities of up to nine years – interest payments, as a percentage of GDP, have been halved in the 20 years since 1998,x whereas the level of debt [% of GDP] has been multiplied by a factor of 1.6. Page 10 of 14  But this very gain has raised questions: are low rates responsible for the increase in government debt, as well as in private sector debt – that of households and firms? In France, they have undeniably facilitated the rise.