samchain/econo-pairs-v1 huggingface dataset:
Table 5  CBC’s exceptional measures to address (current and potential) high-volatility episodes (*)  PROGRAMS  (weekly follow-up)  SPOT NDF SWAP REPO REPURCHASE BANK BONDS 1 BANK BONDS 2 CC-VP DP FCIC 1 FCIC 2  November 2 3 4  December 1 2 3 4  1  January 2 3 4  5  February 1 2 3 4  Lowest value of the series (in CLP)  1  March 2 3  4  1  2  April 3 4  50th percentile of the series  5  1  May 2 3  4  1  2  June 3 4  5  1  July 2 3  4  August 1 2  Highest value of the series (in CLP)  (*) Each measure (row) is an independent sample to code the colors and shows the intensity of each measure by itself calculated using all the available numbers of the series. 23

The bust exposed many structural flaws in the financial system that exacerbated its instability. Without being exhaustive, these included the instability of the tri-party repo system, which supported the nation’s short-term funding markets; the risks of runs in the money market mutual fund industry; and the risk of contagion caused by the huge volume of outstanding bilateral (noncentrally cleared) over-the-counter (OTC) derivative obligations between the major financial intermediaries. The tri-party repo system was centered on two of the major U.S. banks. The system matched investors and borrowers each day—with the investors lending cash, secured by Treasuries and other collateral, to the major securities firms. But, the system was unstable. In times of stress, clearing banks could be faced with very large single-firm exposures—of potentially hundreds of billions of dollars. Not surprisingly, when such counterparties became troubled, the clearing banks were less willing to take on these large intraday exposures. As a result, repo investors, who were primarily worried about getting repaid each morning, were motivated to simply withdraw from the market. As short-term investors withdrew funding, the liquidity buffer of the troubled securities firm was quickly exhausted, particularly as other counterparties to that firm demanded additional collateral to secure their own exposures. Structural weaknesses in the money market mutual fund industry—which was a major source of short-term wholesale funding to the securities industry and various non-bank financial corporations—also exacerbated the crisis. When Lehman Brothers failed, the value of its outstanding short-term obligations collapsed.
The objective of our Monetary Policy deliberations  1  BIS Review 102/2000  - the inflation target - is set annually by the Chancellor, not the Committee, and it is specified fairly precisely. Thus the decision on the policy objective rests with the elected government, its execution in the form of the technical decision-making rests with the MPC; and in this sense we tend to talk about our system as one of “operational independence”. Secondly, as is well known, the Chancellor has set the inflation target objective at 2.5% for each of the first three years of operation. Such an explicit target aids accountablility; and plays an important role in anchoring private sector expectations. Our remit is to aim for this target at all times. We are required to regard deviations above and below the target in the same light and the target is thus a symmetrical one. We are obliged to write an open letter to the Chancellor if we deviate by 1% either above or below. The importance of the symmetry of the target is not well understood, but in the working of the committee it is hugely important. As central bankers, we would obviously like to do “the prudent thing”. And if the 2.5% target had been set as a ceiling, then it would be clearer, at times of doubt, or when the decision was finely balanced, what the right action to take on interest rates would be.

The MPC process, however, involves no pressure to reach agreement. We are each accountable for our views; full minutes are taken and published; our individual vote is publicly recorded. This is counter-intuitive for anyone from a PLC background. It is impossible to believe that a split in the Board of a major corporation, certainly a split that was aired in the press, could exist for any length of time. Either the split would need to heal rapidly, or more likely some high-profile departures from the Board would ensue. But in the MPC a system which permits different views to surface publicly is both refreshing and appropriate. Since economic analysis involves a great deal of peering into the future, it is not surprising that there should be disagreement. There is, of course, the old joke of putting nine  BIS Review 102/2000  2  Economists into one room and getting ten views. But it is better to be open about the disagreements than try to forge a false sense of consensus. Of course, alongside this transparency and open voting system goes a degree of personalisation within the Press. An industry has grown up geared to guessing our personal habits, psychoanalysing our personalities and classifying us into different species of the aviary. And alongside this has gone a demand for even greater transparency which falls only a little short of having TV cameras in the Committee Room.
But before turning to resolvability of firms let me say something first about the FSB Key Attributes (KAs) of Effective Resolution Regimes for Financial Institutions 2 and the process of resolution planning, both of which are driving the building out of the new resolution paradigm. The KAs, which were agreed by the FSB and endorsed by G20 Leaders at their summit in Cannes 2011, are the foundation on which all else has been built: a. The KAs set out our shared objective as authorities – to be able to manage the failure of a G-SIB without adverse impact on system stability, and without recourse to taxpayer funds. b. They list the minimum elements needed for a statutory resolution regime to be effective. As countries have implemented the KAs at national level, this has provided a convergent framework of resolution regimes internationally, smoothing the way for resolution to work consistently cross-border. c.  Finally, the KAs instituted a process of resolution planning for global systemically important banks (G-SIBs) in crisis management groups (CMGs). The power of this should not be underestimated. The status quo pre-crisis was built on the belief moral hazard was better managed through constructive ambiguity. It is fair to say that this did not work out so well. The new paradigm is for authorities to be clear ex ante as to how resolution will work and to ensure it can. Clear with the market, so shareholders and creditors are under no illusion as to the risks they are taking.

This answers to the call that often comes from industry that we should nail down everything in Cooperation Agreements (CoAgs) or work towards some kind of global treaty. I do not think this is necessary to ensure resolution will work effectively. There is a level of detail and complexity in the resolution plans that does not lend itself to a quasi-legal document like a CoAG. But more importantly emphasis on CoAgs misses how the process has evolved. The metaphor originally conceived for resolution plans was living wills. This was powerful, comprehensible by all. It captured the notion that the failure of large banks would not be left to chance in future but instead would be worked through in advance and part of what it would be to be a responsible, regulated entity. But it also gave the impression that each plan would be idiosyncratic, unique to the firm. In fact, as time as gone on it has become clear that for G-SIBs many of the elements of the plans are similar and the identified barriers generic. Indeed discussions in CMGs for individual G-SIBs has translated into minimum requirements for resolvability at the level of the FSB. In the way that we are removing barriers, we are expressly setting out to provide a platform for cooperation to work, ensuring that home and host interests in this process are aligned. The FSB’s TLAC standard is a good example of how the dynamic of resolution planning in CMGs has provided the impetus for the policy changes.
In pursuit of this we look at factors affecting the underlying robustness of the financial system, as well as potential “triggers” which, especially at times of structural weakness, could bring on a crisis. Our remit is of course in relation to the UK financial system – but this work has a substantial international dimension, given the openness of the UK economy, and the international character of much of the City. What does this mean in practice? The Bank’s financial stability work include such things as overseeing the UK payments systems; analysing broader developments in the banking, securities and insurance sectors, and the evolving strategies of London’s securities exchanges; looking at developments in emerging market economies; and contributing to the debate on the reform of the international financial system. In short, the Bank’s financial stability team has to analyse and respond to any developments – market or institutional; structural or temporary – that could threaten financial stability. Our second relevant core purpose is to promote the competitiveness of the UK financial services sector. This is not a lobbying function; we are concerned with the promotion of effectiveness and efficiency, not the acquisition of favours. Nor is it a responsibility exercised only in respect of UK owned firms. The UK financial services sector is more truly international than that in any other country in the world. The Bank, and the other authorities in the City, have an unwavering commitment to openness, and the provision of a level playing field to all firms regardless of nationality.

Another factor transforming the financial services landscape, and quite closely related to the technological factors I have just mentioned, is the globalisation and consolidation of the main market participants. The last decade has seen a global consolidation of the main intermediaries in the world’s capital markets to leave a relatively small number of large players, with large balance sheets and operations spanning each of the world’s major markets. Since these firms are the major users and, in some cases, owners of the market infrastructure in each country, their interests have a strong influence on market structure. Now I think that big is not always best, and actually smaller niche players have more of a future than is sometimes imagined. But that said, in twenty years I think that it is quite possible that the financial world will be dominated by perhaps twenty truly international wholesale banks, including a few genuinely pan-European ones. Now it is possible that these large banks will want to use their own balance sheets to offer a full range of services to their customers, so that they rather than an exchange-based central market become the focus for liquidity. If so, such firms would be in competition with infrastructure providers: for example, when offering in-house trading or custody services to their clients. On the other hand, such firms will also want to continue to trade with each other, in order to manage their own risks and inventory.
Let us consider the prerequisites for capital account liberalisation and Iceland’s position on the path towards fulfilling them: The IMF Stand-by Arrangement has ensured sufficient foreign exchange reserves to roll over Treasury debt in coming years and address potential outflows associated with the first stages of liberalisation. When the loan facilities have been drawn in full, Iceland will probably be in a better position than many European countries in terms of refinancing risk. This will place the Icelandic Government in a comfortable position when it seeks foreign market funding once again. A central government budget aimed at ensuring a primary surplus in 2011 has now been drafted and, according to the medium-term fiscal programme, the Treasury will record an overall surplus in 2013. According to these estimates, public sector debt will peak in 2010. Fiscal consolidation is the cornerstone of the policy aimed at reviving Iceland’s creditworthiness and creating the conditions necessary for capital account liberalisation and sustainable exchange rate stability. Thus it is vital to adhere to these objectives. 2  BIS Review 138/2010  The financial system is now in a better position than it was only a few months ago to withstand the volatility of short-term capital flows that could accompany the removal of capital controls. The most recent Supreme Court judgment eliminated a large source of risk that had made it extremely difficult to estimate the banks’ liquidity. According to the Icelandic authorities’ Letter of Intent, the Financial Supervisory Authority will review the banks’ planned responses to the judgment by 15 November.

The bond market instability that may be associated with market expectations about when capital account liberalisation will begin highlights the role of the capital controls in price formation. Domestic investors are in the same position as foreign investors in that awareness of impatient investors with frozen ISK assets erodes their confidence in the króna. It is important to open up an exit route for the most impatient among the impatient investors  8  BIS Review 138/2010  and create a framework within which the others can divert their liquid króna assets into longterm investment. Conclusion Is it possible to lift the capital controls without causing significant exchange rate instability? Yes, it is – if sufficient confidence has been built. At present, confidence is not present to a sufficient degree to support large steps in this direction. On the other hand, it is perfectly appropriate to begin preparatory work. The Icelandic authorities have made excellent progress in building confidence, although there is still much to be done. Investors’ concerns about the Treasury’s ability to fulfil its commitments should dissipate if the authorities adhere to the fiscal consolidation plans in the 2011 national budget and the estimates for the years to come. Soon it should emerge that Iceland is in many respects on a firmer footing than a number of other developed countries, many of which are faced with sizeable pension obligations in addition to large fiscal deficits and a heavy debt burden.
Moreover, transmission of monetary policy signals is expected to be extended fully to the deposits and loans market, in accordance with the transmission mechanism time lags. The Bank of Albania deems that a good part of above-analysed tendencies would be present during 2012, as well. According to our core projections, the Albanian economy will continue to grow during the year ahead, albeit below its potential. The country’s economic activity will be conditioned by the solution of the crisis in the euro-area countries, economic growth of partner countries, and foreign investor’s attitude to risk. BIS central bankers’ speeches  3  On the other hand, economic challenges in our partner countries may be transformed into positive opportunities for the Albanian economy. Albanian economy attractiveness with low unit labour costs, macroeconomic stability and financial soundness of businesses, households and the banking system may be reflected in more foreign direct investments. While our projections factorize lower foreign demand contribution, in baseline scenarios, the widening of Albanian exports market remains a potential scenario, as well. Economic growth projections presume positive consumption and investments growth at home, in response to improvement of lending terms. The latter are expected to reflect the eased monetary policy of the Bank of Albania and reduced risk premiums in the financial system. Moreover, reduction of room for fiscal stimulus and maintaining of stable fiscal parameters will enable the private sector to create spare funds and cut down risk premiums for the economy.

Anita Angelovska Bezoska: Journalists are one of the main transmitters of monetary policy messages Address by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of Macedonia, at the Journalist Workshop - 2018, organized by the National Bank of the Republic of Macedonia, Skopje, 25 December 2018. * * * Distinguished media representatives,  Welcome to the fourth Journalist Workshop hosted by the NBRM. I am glad to see you in greater numbers this year, which is confirmation of your interest in the topics that will be the focus of today’s event. Allow me to take a brief look at several basic, yet important aspects of central bank communication: 1. Why is central bank transparency and communication important and needed? 2. How has central bank communication evolved over the years? What were the challenges in the period after the outbreak of the global crisis and how were they addressed globally? 3. Challenges in central bank communication in the Republic of Macedonia. A comparison between the current and the past transparency level and central bank communication shows an exceptional transformation in this segment. The need for strengthening central bank transparency was brought to the fore for the first time in the 1990s, implying enhanced communication with the public, including the media. This change is associated with the concept of central bank independence, or the independence of the monetary policy from fiscal policy.
Towards this end, the legal practitioners should work together to create a network to foster its development. This might involve the setting up  4  BIS Review 102/2010  of a specific association of international groupings of Islamic finance legal practitioners working together towards harmonisation of practices at the international level. Thank you. BIS Review 102/2010  5

Muhammad bin Ibrahim: Major milestone for financial integration in ASEAN Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Luncheon, hosted by Bank Mandiri, Kuala Lumpur, 6 July 2017. * * * I am pleased to be here today to deliver the remarks for the lunch gathering hosted by Bank Mandiri. I am confident that Bank Mandiri will be the first Qualified ASEAN Bank in Malaysia, a major milestone for financial integration in ASEAN. Indonesia and Malaysia – neighbours and friends Let me start with the close relationship between both of our countries. Our relationship extends beyond our geographical proximity but is bound by our similarities in language, culture and of course – food. These natural forces have allowed us to forge and strengthen a strong history of cross-border trade and investments. Businesses from both countries have also strongly committed to invest and contribute to each other’s socio-economic development. Malaysian companies have made significant investments in Indonesia, amounting to USD12.1 billion at end 1Q-2017. These investments span the financial services, telecommunication and agriculture sectors. In fact, the collaboration between Malaysian and Indonesian corporates gave birth to Malindo Airways Sdn Bhd in 2012. It speaks volume of the partnership and close cooperation between our two countries. Indeed this venture will further open up ASEAN skies and expanded the close ties between the people of Indonesia and Malaysia. Over the last few years, Indonesian firms have also started to increase their presence in Malaysia.
To this end, an index of aggregate macro-financial imbalances, or of institution-specific vulnerabilities, is tested against variables such as credit growth, property price changes, private sector leverage and current account deficits, to discover which variables predict that index. Measures of bank leverage, balance sheet growth and maturity mismatches may also be used in order to gauge the extent to which the financial sector is driving developments. Second, to assess the relative importance of different risks for financial stability. This is done using “adverse scenarios” that are designed and macro stress-tested to establish the potential severity of different types of risk and the overall resilience of the financial system to severe shocks. Such models, including top-down stress test of individual institutions, allow risks to be assessed more broadly and at a higher frequency than is possible with bottom-up exercises run by financial institutions, thus enhancing the “real time” information on systemic risk available to policymakers. Third, to assess the financial channels through which risk can be propagated, thereby factoring-in potential second-round effects. The use of contagion and spillover models allows, for example, the assessment of the impact on the financial system of the failure of a particular financial institution or of turbulence in a particular sovereign debt market. BIS central bankers’ speeches  3  We could consider how this framework would have functioned if applied retrospectively. For example, the monitoring of the credit-to-GDP ratio as an early warning indicator of widespread asset-price misalignments would have initiated early warning signals as early as mid-2005.

Vítor Constâncio: The governance of financial stability in the euro area Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the “ECB and its Watchers XIII” conference, Frankfurt am Main, 10 June 2011. *  *  *  Introduction Ladies and gentlemen, It is a pleasure to take part in this thirteenth edition of the ECB and its Watchers conference. I would like to use my intervention today to reflect on how the economic and financial crisis should alter policymakers’ conception of the governance of financial stability in the euro area. Prior to the crisis, financial stability was often viewed in a rather abstract manner, as a condition that flowed from other well-defined pre-conditions – for example, low inflation – or as a concept that could only be addressed after the fact – for example, once bubbles had burst. However, the crisis revealed that financial stability warrants much more prominent attention:   First, it became clear that financial stability depends on a much broader range of sources than was previously acknowledged, from both macroeconomic imbalances in the real economy and imbalances in the financial sector.   Second, it was revealed that the channels through which financial instability could spread are various and complex, with negative consequences for both the financial and real sectors, thus requiring ex ante and not only ex post policy responses.